Economics

Economics

A Spoonful of Inequality Helps the Medicine go Down

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The conventional wisdom in the circles I hang out in – pro-Hillary, morally conscious,happy bunnies who pretend to enjoy French wine and opera – is that the greatest scourgeon humanity after the bubonic plague is inequality of wealth. They worship Pope St. John Paul Piketty and canonize Archbishop Paul Krugman. Not only is inequality bad for its own sake, they say, it makes people ill, like medically ill.

Their premise always struck me as specious. I once took them through a thought experiment. Imagine, I said, you time travel to the Bengal famine. There was a lot of equality then – people were equally malnourished. Everyone’s ribs protruded equally because of muscle wasting from marasmus. The loss of protein from kwashiorkor made sure everyone’s belly popped out without prejudice. Starvation because of poverty is a great leveler. It cares little about gender, caste or religion. It is non-judgmental.

Will New Funding Improve Alzheimer’s Dementia Outcomes?

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Alzheimer dementia mortality is increasing in the United States, while heart disease and cancer death rates have decreased at least 25% recently.1  New cardiac and cancer treatments frequently make headlines.  However, the assessment of Alzheimer’s therapy is stark: “…there are currently no treatments that change the course of this progressive brain disorder,” [original italics] so stated in the 2014-2015 Alzheimer Disease Progress Report by the National Institute of Aging (NIA).2

President Obama signed the National Alzheimer’s Project Act in 2011, with a goal of having effective therapy by 2025.  Now five years later, clinicaltrials.gov lists fewer than 120 Alzheimer drug trials in the US recruiting subjects, with nearly 500,000 new patients each year. Heart disease has almost 800 drug trials, while adult cancer has almost 4000 drug trials listed.

Clinical research efforts in a disease are reflected by the number of pertinent clinical trial publications. We examined Pub Med data along with US mortality statistics to show the juxtaposition of those measures for Alzheimer’s disease, heart disease, cancer and six other leading causes of death, (Figure 1).3,4  

Reductions in US disease mortality have been proportional to the number of trials conducted in each disease except Alzheimer’s, during the years 2000-2013. Alzheimer’s disease is a significant outlier, since mortality is increasing while the number of peer-reviewed publications lags behind other conditions.

Stephen Curry’s Health Care Plan

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The 3 point shot has revolutionized basketball and turned the NBA upside down. The smartphone has revolutionized health care and turned the doctor-patient relationship upside down.

Let’s examine those two statements.

In a recent Wall Street Journal article, Martin Johnson describes the dramatic changes that the creation of the 3 point shot has created. The prior era in was dominated by a dominating big man-  Bill Russell, Wilt Chamberlin, and Kareem Abdul Jabbar.  As Johnson writes, “This made intuitive sense: The better a team is at protecting its basket, the better its defense should be.”

Suddenly, the rules changed and the 3 point shot was created.

With new rules, new values.

With new rules, new math, new economics for the NBA.

What had been valuable- the dominant big center to defend the basket- is no longer as valuable.

What had not been as valuable- a small, quick, long distance shooting guard, and those best suited to defend against them- now are a valued resource.

The evidence of this ‘transformative innovation’ is everywhere; from Stephen Curry, a small nimble, excellent shooting guard, winning the NBA MVP award to the NBA finals between the Cavaliers and the Warriors- where the defense is as fierce at the 3 point line as it is right under the basket.

So the  new rule establishing the 3 point line has turned the game inside out, shifting the focus from the ‘big man’ to a new type of player – as John Hollinger, the Memphis Grizzlies vice president of basketball operations, states in the Journal, “It has completely changed the way players are valued on the market.  Now we put a premium on length and basketball IQ.”

Are Your Health Cost Savings an Illusion?

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flying cadeuciiThe New England Journal of Medicine carried an excellent article by David Casarette, MD, on the topic of health care illusions and medical appropriateness. Click here to read the full article. Hats off to Bob Stauble for a heads up on this article.

Casarette observes that humans have a tendency to see success in what they do, even if in truth there is none. Casarette writes, “Psychologists call this phenomenon, which is based on our tendency to infer causality where none exists, the ‘illusion of control’.” This illusion applies in all walks of life, especially in politics and parenting, and it includes medical care as well.

In medical care, the phenomenon has been referred to as “therapeutic illusion“, and it impacts both doctors and patients. Undoubtedly, therapeutic illusion is why placebos can so effective.

The Prescription for High Drug Costs? Transparency for Starters

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Ceci ConnollyFor most Americans, $280,000 might represent the price of a home or perhaps their entire retirement savings. But for the 1.3 million people in this country stricken by rheumatoid arthritis (RA)that quarter million dollars could be their drug bill.

Rheumatoid arthritis is a debilitating disease that causes painful inflammation and swelling of the joints. Left untreated, it can lead to permanent disability. Thankfully medications such as Enbrel, Humira and Zeljanzcan keep patients healthy enough to stay active and keep working. Yet the price tag is quickly becoming out of reach.

One recent report from Express Scripts found that spending on drugs that treat inflammatory conditions such as arthritis rose 25 percent in the last year alone. The annual cost of treating the nation’s RA sufferers is expected to reach $9.3 billion by 2020 – a 45 percent jump from 2013.

For a 45-year-old patient recently diagnosed with RA, the lifetime cost of medication is likely to exceed $1.4 million. Even if that person has 80 percent of their costs covered through insurance, the math works out to $280,000 in copays alone.

There’s something out of kilter when families may be forced to choose between investing in a home or easing a loved one’s pain. Yet that is exactly the sort of Catch-22 some will face if we do not find a sensible way to price drugs.

How I Learned to Stop Worrying and Love For-Profit Medicine

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flying cadeuciiWhen I started medical school, my South Asian immigrant parents quietly hoped I would find my way to cardiology or another glamorous specialty. Instead, I spent a decade — first as a medical student, then as an intern and resident in internal medicine — focused on advancing the right to health among poor people and others with little access to quality health care.

Through high-impact nonprofit organizations, political campaigns, and grassroots organizing in urban communities and among health professionals, I was part of an incredible community focused on making American medicine better, safer, and affordable to all.

So when it came time for me to find a “real job” after my residency, I assumed it would be in a nonprofit organization with a laser-like focus on transforming underserved health. Imagine my astonishment, then, to discover my life’s work in Iora Health — a private sector, venture-backed, for-profit primary care startup.

Profit and medicine

Critics have said that for-profit medicine makes money by finding ways to avoid caring for sick people “in their time of greatest need.” It’s also been pointed out that the Hippocratic oath doesn’t mention “money, financing, or making a profit.”

God and Statins

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flying cadeuciiOf life’s two certainties, death and cataracts, it seems statins defer one and prompt the other, although not necessarily in the same person. If you blindly love life you may be blinded by your love for life.

In the HOPE-3 trial, ethnically diverse people without cardiovascular disease were randomized to 10 mg of rosuvastatin daily and placebo. The treatment group had fewer primary events – death from myocardial infarction (MI), non-fatal myocardial infarctions, and non-fatal stroke. For roughly ten MIs averted there were seven excess cataracts. Peter may be blinded without being saved. Paul may be saved without being blinded. And then there is Rajeev who may be blinded and saved. But the very nature of primary prevention is that you don’t know you’re Peter, Paul or Rajeev. So everyone is grateful to statins. Not even God of the Old Testament had such unconditional deference.

Once you’re taking statins there is no way to disprove that any and every breath you draw is because of statins. Statins enjoy the metaphysical carapace, the immunity from falsification, which not even God enjoys. At least you can experiment with God. Don’t pray for a week and see if you’re still alive- you know if God really cares about prayer-adherence. Even if you die at age 55 on statins, you can never disprove that you wouldn’t have died sooner if you weren’t taking statins.

The Transparency Trap

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flying cadeuciiOn a recent shift in the Emergency Department, a resident boasted to me that she had convinced a patient to have an MRI done after discharge, rather than in the hospital. She was proud of this achievement because MRIs cost much more in the hospital than they do elsewhere – sometimes thousands of dollars more. To advocates of “cost-conscious care,” a new movement in medical education that aims to instill in young doctors a sense of responsibility for the financial consequences of their decisions, this story seems to belong in the ‘win’ column.

But this story also raises troubling questions: Why wasn’t the resident more concerned about how the hospital’s charging practices were leading her to delay care for her patient? What about the prolonged anxiety the patient would suffer? What about the extra day of work she would have to miss? And most importantly, why does an MRI cost thousands of dollars more in the hospital than it does across the street?

Like many doctors, she had fallen into the ‘transparency trap.’ This phenomenon is an unintended consequence of price transparency efforts that have come in response to patients and doctors being kept in the dark for decades about the prices of common services. Unfortunately, as the CEO of one large hospital put it, “the vast majority of [prices] have no relation to anything, and certainly not to cost.” In fact, studies have shown that in a functional market, MRIs would cost somewhere around $250, and we wouldn’t be nearly as concerned about doing too many of them.

The Narrowing of the Network

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The concept of restrictive (oh let’s call them euphemistically “narrowed”) networks has for decades been the third rail of healthcare. Ask Hillary Clinton, who put her foot on that third rail in the 1990’s while attempting to reform healthcare. In the same vein, HMOs in the 90’s also tried to restrict networks, resulting in vicious backlashes.

One of those backlashes was the enactment in many states of so-called “any willing provider” or “freedom of choice” legislation. At last look, some 27 states still have a form of such legislation on their books. Most credible studies show that such laws increase the cost of healthcare.

Moreover, the ability of insurers to remove physicians from their network in many states is severely restricted by so called “fair hearing” legislation that makes the pain of achieving physician expulsion worse than the pain of leaving under performing physicians in network.

We understand that when a physician cries “foul” against an insurer, public sentiment will favor the physician, and over the years, it certainly has been  reflected in this and other legislative attempts to tie insurers’ hands.  After all, no one wants to go to the prom with a health insurer.

As a result of this and other phenomina, there has been the highly chronicled swoop toward mediocrity in the delivery of healthcare in the United States. And insurers have certainly contributed here. Up to now, insurers have paid physicians using the fee for service payment method. This method merely requires physicians to demonstrate that they performed a function, at which point they are paid at an amount that does not vary regardless of quality or outcome. This is a completely volume driven environment with predictable results.

Can the Exchanges Be Saved?

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Michael Turpin 1“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” —William Arthur Ward

Looking confidently past the skeletons of drowned state and federal healthcare experiments, America’s health insurance exchanges set sail in January 2014. Disregarding the rough seas ahead, healthcare reform pundits and legislators applauded the Affordable Care Act’s signature public expansion vehicle as an impenetrable solution for achieving affordable coverage and competition.

Less than two years later, the exchanges are taking on water.

In November, United Healthcare lowered earnings projections, a move driven primarily by its hesitancy to commit to enrolling new exchange members until risks are better understood. While other insurers were quick to reassure investors that the public exchange market remains a viable means for organic growth, a low-pressure system of doubt is already building over the nascent public exchanges.

Initial enrollment projections for 2016 are fewer than 10 million members—about half of the 20 million target estimated by the Congressional Budget Office. In their rush to expand coverage to the uninsured and under insured, many public officials and industry neophytes failed to consult with those who have firsthand experience with the difficulties of underwriting those who are obtaining insurance for the first time.

FAST FOCUS 

Enrollment projections for 2016 are fewer than 10 million members—about half the Congressional Budget Office target of 20 million.
The rush to participate in public exchanges has attracted inexperienced players seeking a piece of a $300 billion premium opportunity.
Investors want desperately to believe healthcare is ripe for transformational disruption.