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Month: November 2004

TECHNOLOGY: Dan Weintraub on the HIT world

If you want a slightly more thoughtful commentary than I provided live blogging the HIT conference, whip over to this column by Dan Weintraub on Technology and Health. Although he doesn’t come out and say it directly, Dan notes that the dis-integration of the system is the major barrier to inter-operability. And of course the VA and Kaiser are the models that he cites as doing the best work here — which means that no real Americans are going to enjoy the benefits (OK, OK, that doesn’t mean that veterans and KP members aren’t real Americans but in terms of the health care system they are weird exceptions!).

QUALITY: Millenson on Pay For Perfomance

Michael Millenson week continues here at THCB!

Despite giving my team at IFTF almost no credit for inventing the phrase (oh, I can be as petty as any academic!) Michael has written a pretty good article called Pay for Performance: The best worst choice. Millenson notes that some adherents of antecedents of P4P existed long ago in the medical system before the AMA had them taken out, put up against the wall and shot (or the professional equivalent). Given that Millenson quotes the AMA Chair as saying that P4P is a "scam designed by multi-millionaire Health Plan CEOs to take advantage of gullible physicians", it seems that some things have changed little. And why would you want your performance be reflected in your pay, especially as your performance is apparently as bad (or at least as inconsistent) as much of the care delivered in this country, even by the most prestigious institutions. (See 30 years worth of Wennberg et al if you don’t believe me). For that matter, given the ability of the plans and the rest of the suppliers to game the system in the past, I would be worried as a doctor is I was going to essentially give a with-hold away that I might not see back. But for the rest of us, as Millenson says, given the choice that we have now, P4P is the best one out there.

BTW the article is published in a somewhat obscure British journal called Quality and Safety in Health Care. It’s subscription only, but you dear reader can get to this article by special arrangement only from this page. Ooh, the power of THCB!

HEALTH PLANS: United swallows Definity

Possibly also to be headlined, Dotcom survives and makes good! For a mere $300m UnitedHealth Group has bought CDHP player Definity Health which gives United a platform into the self-directed consumer plan world. Hard to tell exactly how much cash Definity has gone through, although they raised some $45m by the end of 2001 and their web site says that they’ve had $70m invested. So it’s not a terrible return if that’s all that went in. Apparently they have some $100m a year in revenues, although whether that is just ASO fees or includes premium revenue is unclear (I’d hazard a guess at the former).

Either way United is not just buying revenue, they must believe that they’re getting a platform which would take too long for them to build themselves. Definity for its part has obviously decided that waiting for more organic growth in the big group HSA/CDHP market is going to take too long for them to go the IPO route and a bird in the hand…

But this is at least one vote for the self-directed plan having a future. And if it’s a total bust…..well at a mere $300m it’s not Aetna-US Healthcare all over again.

QUALITY: Five years on from To Err Is Human

Nov 29, 1999 saw the release of possibly the most famous report in health care since the Flexner report excoriated the medical school system in the early 1900s. The report was called To Err is Human and it was created by an expert panel working under the auspices of the non-partisan Institute of Medicine. Based largely on the work done some 10 years earlier by the Harvard group looking at malpractice, To Err is Human made the leap into the public consciousness despite being an obscure report about the medical system, rather than a sexy report about new medical discoveries. Here is the IOM’s original press release.

At least two major news events in previous years had helped in the build-up–the death by wrong chemotherapy dose of the Boston Globe’s health columnist, Betsy Lehman, in the most prestigious cancer center in the most medically prestigious city in America, and the amputation of the wrong limb from a patient in a hospital in Florida. While this type of thing had been going on forever, patient safety suddenly became a screaming big deal, and it remains so today. However, it remains a big deal in the sense that medical errors are still routinely going on — in fact THCB reported just a few months back of an identical death by wrong dose of chemotherapy to that which killed Betsy Lehman. And just last week a Seattle medical center publicly apologized for a mix-up in which a patient died as a result of being injected with a toxin rather than a harmless dye.

The patient safety movement is also hamstrung by an unwillingness of both Congress and medical leaders to get really serious about the problem. Earlier this month in a survey by Bob Blendon at Harvard, in conjunction with Carolyn Clancy at AHRQ and the Kaiser Family Foundation, the public showed that they do not trust the medical system’s safety. Here’s the survey and the three authors also acknowledged the fact in the NEJM.

Throughout this entire time, or at least since the publication of his wonderful book Demanding Medical Excellence, Michael Millenson has been the leading lay critic of the medical establishment on its poor response to the patient safety issue, even following the IOM report. I asked Michael for his reaction on the five year anniversary. Here are his thoughts:

It’s official: the sage leaders of the health care industry have gathered for the five-year anniversary of the IOM To Err is Human report and concluded that not enough has been done to actually reduce the patient death toll since the report appeared.

It is, unfortunately, not a surprise that the equivalent of three jumbo jets crashing every two days continues to occur — although, in fairness, enough progress has been made that we may assume that the load factor on those jets has dropped somewhat. The death toll taken by tired residents gained national attention with the death of Libby Zion in the mid-1980s. Two decades later, strong rules limiting resident work hours have finally taken effect nationally. Wrong site surgery was the subject of sustained national headlines in 1995. JCAHO rules mandating the tremendously complicated solution — use a pen to mark the site — went into effect in 2004.

The fact is that 747s are not crashing in hospital parking lots; the preventable death toll remains largely invisible. Hard working, well-meaning physicians and nurses are all trying hard to do their best for patients, and their failures generally occur among people who were very sick to begin with. As the horror stories fade, Congress can barely summon the energy to mandate voluntary error reporting.

In two years we’ll have the five-year anniversary of the IOM’s Crossing the Quality Chasm. One can safely, as it were, predict that we will then be talking about the sad lack of progress in making evidence-based medicine an integral part of routine care.

One other thought. Health policy wonks had known about this for years. Why was this report become such a big deal in the first place? Millenson explains:

The IOM was lucky. The release came in a slow news time (post-Thanksgiving), when there was nothing new on various Clinton scandals and Boris Yeltsin, as I recall, was on the death watch but hadn’t died of alcohol poisoning or whatever. So: slow news day, catchy topic with soundbites, and real human interest examples (courtesy of newspaper stories) that allowed the TV folks to put real people on film — and you’ve got a big deal story. As opposed to the generalizations of most "reports," including Chasm.

Now, not pure luck. They were trying to make a splash. But timing was lucky. And they weren’t smart enough to realize the true elements in their success, ’cause they thought Chasm would be even bigger play because the topic was bigger. Sure, and putting out a report on problems with America’s plumbing systems will be a sure-fire media success, too.

Of course most people don’t know where the quote in the title of the IOM report comes from, but then again most people weren’t tortured through English literature class at their English boarding school the way I was. And the full phrase that Alexander Pope wrote?

Good nature and good sense must ever join;
To err is human, to forgive divine.

I think it’s fair to say that although we do have the "good sense" needed to make medicine safer, we don’t have the "good nature" required to put that sense into operation. So we don’t yet deserve any divine forgiveness.

TECHNOLOGY: The UK’s EMR project is not apples to apples, with UPDATE

As we go into this most uniquely American holiday, here’s a story or two about the place the pilgrims were thankful to get away from. Of course my British friends tell me that Thanksgiving is really on July 4th for them.

First up is CapGemini’s John Quinn (a Brit) writing about why the national health infrastructure initiatives in the UK and the USA are very different. He correctly points out that the UK is some 3-4 years ahead in its process, and that it is basing its infrastructure on a largely government run health system. He also points out that the financial commitment from the government there is huge — adjusted for population it’s the equivalent of $140bn over 10 years here. Adjusted for proportion of GDP spent on health care per head, the UK’s number is closer to the equivalent of $400bn over 10 years. Here, despite all the rhetoric the funding for Brailer’s office was just cut in yesterday’s spending bill, and he’ll be living on handouts for the next little while. Of course private sector players here are spending real money, and even $40bn a year is less than 3% of total health spending. So it’s almost certain that we’ll spend more than that number on IT here.

But it’s what Quinn doesn’t point out that may be even more crucial, as it relates to what we’ll be spending that money on. In his talk last week Brailer noted that the US has two challenges. First getting physicians to use the EMR, and then getting all those EMR’s to talk to each other. The Brits are focusing on the second part of that, the inter-operability piece. By the late 1990s they’d basically already done the EMR piece, albeit in a rudimentary way and mostly outpatient only. The average GP practice in any small British town vastly out-does the EMR-use anywhere in the US, apart from a few notable exceptions. So the Brits are starting from a position of strength in EMR uptake (at some 80% penetration), while the US needs to catch up. And of course the inter-operabilty piece is an imposing (or impossible) challenge here, where there are no incentives for the competitors in a marketplace to cooperate, and no government mandate telling them to, even (as Kaiser’s Robert Pearl pointed out) if it would be good for the health of the community and nation.

Meanwhile I’m sure my British surgeon father wishes this had happened to him; the BBC reports that a hospital in Winchester, Hampshire (which is incidentally where I went to high school) overpaid its doctors by 290,000 GBP and wants its money back

UPDATE: Matt Quinn notes that interoperability could be done, and that there is a private sector model for it–well sort of:

While it’s a vast oversimplification from the cultural adoption standpoint, the technology to implement and interconnect clinical systems across the nation is not too different from the technology that connects all of Wal-Mart’s point of sale and logistics management systems across the country such that anyone in a Wal-Mart store has nearly real time access to critical alerts and supply information and the HQ in Bentonville can monitor and research the whole network.

Of course, a key difference is that Wal-Mart centrally funded such a system and it appears that the federal government will not.  It’s not as if — given the choice — each Wal-Mart store would have funded, implemented and connected it’s own system without central funding.

Oh yeah, and Wal-Mart employees cooperate a lot more than physicians do (i.e. can’t refuse to use the system).

PHARMA/POLICY/QUALITY: A deluge, sorry

I said a while back that I wouldn’t do just tell you to go read other stuff, but there’s a deluge that you just must pay attention to–all out in the last 24 hours.

1) Kaiser Family Foundation is out with a confirming study that those seniors at the bottom with high drug spending will be better off from the drug-benefit in the MMA, but that many more in the middle will not be.

2) Arnie Milstein shows why he believes that the "shark" of rising health care costs will be contained by the efficiencies brought to the system by the "engineers".

3) The continued aftershocks of the Vioxx hearings continue very very loudly. JAMA is out with a whole raft of articles mostly suggesting that major FDA reform is needed, and that drug company studies have routinely withheld data from the public and by inference JAMA and its fellow journals. While a lawyer for Bayer fires back very aggressively, Astra-Zeneca CEO McKillop seems to be breaking with PhRMA orthodoxy and admitting that there’s a real problem–possibly in an attempt to save Crestor before it falls victim to the Vioxx syndrome.

Given that my work putting together the FierceHealthcare newsletter (go sign up!) was, shall we say, made somewhat challenging by this plethora of activity, I suggest that you go take in some of these articles, and I’ll be back with more comment later in the day/week.

Thank God we get to take the end of the week off!

Meanwhile one of my true fans has nominated THCB for the worst medical blog over at Echojournal!

PHARMA: The Industry Veteran on drug patents and who pays for research

Last week the NY Times had an NY article about drug pricing that suggested a new approach for keeping innovation while controlling prices. In particular it suggested changes to the way the patent system works, and how the Federal government might change some of the ways it spends the $30bn the NIH spends on basic research and the $40bn it spends via various programs as a purchaser on drugs:

The government could compensate drug companies for their inventions as an incentive for them to keep innovating. How to determine how much an innovation is worth? One possibility would be for the government to selectively buy patents at a premium over the price a private bidder was willing to offer, and then put them into the public domain, Professor Kremer said. Aidan Hollis, an assistant professor of economics at the University of Calgary in Alberta, devised a different approach: the government would set up a fund to compensate drug companies based on how much their new drugs improve the quality of life and how often they were used. These alternatives would carry several benefits, economists say. In addition to making drugs available at lower prices, they would make it much less profitable for pharmaceutical companies to spend millions of dollars to develop drugs, like Nexium and Clarinex, that are protected by patents but offer little improvement over similar drugs already on the market.

The goal is not to spend less to develop new drugs, Professor Hollis said, but to get more therapeutic bang for the buck – by channeling investment to where it matters most – as well as to increase access to the resulting drugs. "This can be done within the same budget as we devote to pharmaceuticals now," he said.

The Industry Veteran is intruiged by this ray of innovative thought in the nation’s paper of record. He writes  for THCB that:

There are some cute ideas here, but in what is rare for a piece of mass media journalism, the author did a good job of pointing out the flaws in each one of the patent-altering proposals. My own ideas on this matter are somewhat similar to one of the proposals. Let the government fund and conduct all new drug research from pre-clinical up through Phase I clinical trials. At that point they would auction off the compounds, each carrying patent exclusivity to run from the auction date and extending a specified number of years. Since the Big Pharma companies are, essentially, late development managers and marketers, my scheme would just rationalize the process. The auctions would attract high bids because the compounds would carry patent exclusivity and not, therefore, become immediate generics. Of course, I don’t know how much this process would reduce drug costs. I suspect it wouldn’t be much at all. The main virtue of my plan is that it would allow clinical needs and scientific evaluation to drive research instead of profit potential. Then too, it might knock down the fiction that Big Pharma propagates about their high R&D costs for introducing every product. People familiar with the situation already know that their claim is BS, but I suppose the current fiction diverts the general public.

Isn’t it just like economists to advise fixing the basement when the roof is leaking? You want to reduce drug prices? Use price controls the way Europeans do. Afraid that will stifle innovation? Use tax policy to end the 50% tax credit and the expense deductions for me-too’s and for cock-raising, wrinkle-smoothing, lifestyle products. That way you give drug companies a simple message: innovate or die.

POLICY: A Blue state Republican talks about expanding healthcare access

One of the great ironies of American political life is that three of the biggest Blue states have Republican Governors. One of those governors (and of course it’s not Arnie or Pati-Pati-Aki) has developed a plan for universal health care, of sorts. OK so he’s been forced into it by the Democrats who run the rest of the state, and he doesn’t want to put any more money into it but Massachusetts’ own Mormon Mitt Romney is at least talking   about expanding healthcare to the uninsured.

His theory is that he can expand Medicaid (i.e. get the Feds to pay) to more of the uninsured, relax state mandates on insurers so that cheaper plans can be offered to the working poor, and expand the state’s community clinic program. Ideologically this isn’t a million miles away from what Bush sort of hinted at in the campaign. But this is a real announcement, and we haven’t heard Bush say anything nationally–and we won’t. So look to state experiments, and hope that the fate of Tenncare isn’t shared everywhere else they try to extend health coverage. And for the time being we can all go along with the fiction that no real subsidies are needed to get health insurance to the working poor.

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