By MERRILL GOOZNER

The Government Accountability Office last week appointed two “faster cures” patient advocates and a former insurance company executive now on the AARP board to the three slots reserved for patient and consumer representatives on the Patient-Centered Outcomes Research Institute board, which will oversee comparative effectiveness research under health care reform.

The reform legislation passed last March gave GAO the job of appointing the 17 public members, which also includes five representatives of private payers, five physicians, and three industry representatives (one each for drugs, devices and diagnostic manufacturers). A full list can be found here.

The three “patient and consumer” representatives are:

• Ellen Sigal, chair, Friends of Cancer Research.

Sigal is an outspoken advocate for more money for cancer research. Her board is comprised largely of fellow executives in the research community, including staff from the American Cancer Society, Research America!, and the American Society of Clinical Oncology, which represents cancer docs. She serves on numerous non-profit boards, including the Reagan-Udall Foundation set up by the Food and Drug Administration to expedite drug development; and has served on numerous Institute of Medicine panels investigating new ways of conducting cancer research that can lead to faster access to new medicines.

Continue reading “Consumer Groups Shut Out of Comparative Effectiveness Board”

By MERRILL GOOZNER

The latest analysis of health care reform – out this week from bean counters at Medicare – shows reform will raise health care spending slightly over the next 10 years, not reduce it as promised by President Obama. That won’t make selling it on the stump any easier. Yet there’s a glimmer of hope in the out years of the 10-year projection that the plan will begin to “bend the cost curve.”

Here’s the real bad news for reform supporters. The private insurance market will absorb most of the increase, and most of that will fall on individuals. Employer contributions for their workers’ private insurance will actually fall $120 billion in 2019 from previous projections because of reform.

Individuals will get hit two ways. First, the actuaries at CMS are projecting a huge 9 percent increase in out-of-pocket expenses in 2018 and 2019, after the so-called “Cadillac tax” goes into effect. This is a steep excise tax on high-cost insurance plans. To avoid tax penalties, experts expect employers with such plans – which may only be high-cost because they are filled with sicker and older beneficiaries – will reduce coverage by increasing co-pays and deductibles.

A second factor driving out-of-pocket expenses higher for individuals under reform will be the insurance mandate, which will drive many people to seek coverage through the new state exchanges. CMS predicts over 30 million people will be getting insurance through the exchanges in 2019, substantially more than the 24 million projected by the Congressional Budget Office last March, when reform passed.

Continue reading “Consumers to Pay More Under Reform”

By MERRILL GOOZNER
Journalist-turned-stock-analyst Ramsey Baghdadi of Concept Capital, who formerly wrote for the RPM Report, tells TheStreet.com that Food and Drug Administration Advisory Committee recommendations are down to 52 percent “yes” votes this year, “the worst year since 2007.” He compares that unfavorably to 2009 and 2008 when the advisors gave positive nods 75 and 80 percent of the time.

Reasons for the tougher regulatory environment, according to Baghdadi? “First, the FDA is bringing more drugs in front of advisory panels due to changes in FDA law that require most new drugs to be reviewed by outside experts,” the article notes. “Second, stricter conflict of interest rules implemented by FDA (in the wake of the 2007 reform law) have made it more difficult for the agency to recruit experienced panel members.”

If inexperienced members without conflicts of interest are more prone to voting no, how does that explain 2007, when the current rules weren’t in place and there were still 50 percent “no” votes? Continue reading “Independent Advisors Prove Independent”

By MERRILL GOOZNER

Over the weekend, the two New York Times reporters who challenged the core findings of the Dartmouth Atlas of Health stuck to their guns in a detailed response to the rejoinder to their critique. The Dartmouth Atlas, which documents regional variation in Medicare spending, provides the intellectual underpinning for assertions by health care reformers (including those in the White House) that 30 percent of all health care spending is wasted and does not improve either the quality or outcome of care.

The Times‘ original critique (see this GoozNews post) contained three main ideas:

• The Dartmouth researchers fail to adjust their maps for regional variations in prices;
• The Dartmouth researchers fail to adjust their maps for illness burden; and
• The assertion that more spending leads to worse outcomes is not borne out by the data. In some cases more spending leads to better outcomes.

Some of this back-and-forth may sound like a quibble over language. Is it “30 percent” of health care is wasted or “up to 30 percent,” as the Dartmouth researcher now state in public? Reed Abelson and Gardiner Harris provide a link to the original 21-page response to their queries. “We think the 30 percent estimate could be too low,” the Dartmouth researchers wrote in a highlighted section.

On the other hand, the Times reporters appear to be taking a step back on the price issue. They went back to David Cutler, the Harvard health care economist whom they originally quoted. Cutler told them that the original 2003 articles by John Wennburg and Elliott Fisher of Dartmouth that appeared in the medical literature did, in fact, adjust for price. “But he said he agreed with the Times assertion that most of the atlas’s maps and rankings, as distinct from the group’s academic work, are not fully adjusted for prices,” Abelson and Harris wrote.

Notably, Cutler is now hedging his bets on the “30 percent is waste” argument. “Some believe that number is higher, and others think that it’s lower,” he wrote in the latest Health Affairs. “But there is little disagreement that health care is characterized by enormous waste.”

In my view, it is the dispute over quality that really needs to be explored by other researchers and policymakers. Eliminating waste ought to improve quality. It has always been true in manufacturing that reducing steps and reducing waste not only reduces costs, but it improves the quality of the finished product.

There’s no reason to think it won’t be true in delivering a complicated service like health care, which some have compared to building and flying jet airplanes. Doing more than necessary to get the job done will only increase the possibility that errors will occur in the process, which in health care translates into more complications, further costs and, in some cases, lost lives.

Yet the Times reporters continue to assert through their dissection of the Dartmouth data that more spending on more services may actually result in higher quality. They go back to the original research — the two studies published in 2003 — to make their point:

The researchers are incorrect in saying that the results of those 2003 studies were “all in the same direction.” In fact, two of the various measures of quality and mortality cited in the articles actually seemed to show that more spending could correlate to better care. [footnotes 2 and 3] Heart attack patients in the most expensive regions, for example, were more likely to receive necessary beta blockers – a positive correlation between spending and quality. Similarly, hip fracture patients experienced “a small decrease in mortality rates” in more expensive places – another positive correlation.

We have very poor metrics for measuring quality of care, and one of the examples they cite shows why. Giving beta blockers is a “process” measure. We know from clinical trials that giving beta blockers after a heart attack improves outcomes. But does it improve outcomes the same in regions where the ratio of obesity-related heart attacks to stress related heart attacks differ? Does it have the same effect in regions with higher proportions of mild heart attacks (because they are more likely to use a sophisticated blood test to categorize chest pains as a heart attack) than it does in a region with a higher proportion of serious heart attacks?

These are the confounding variables that no data set can capture adequately until it fully reflects both the diagnoses of the incoming patients as well as the care delivered. The Dartmouth Atlas data, which relies on Medicare claims, falls far short of that goal. And the Times reporters, by trying to re sift the data to make a counterpoint, only add another blind man’s hands on the elephant in the room — the absence of electronic data about the actual medical conditions of the patients behind those Medicare claims.

Merrill Goozner has been writing about economics and health care for many years. The former chief economics correspondent for the Chicago Tribune, Merrill has written for a long list of publications including the New York Times, The American Prospect and The Washington Post. His most recent book, “The $800 Million Dollar Pill – The Truth Behind the Cost of New Drugs ” (University of California Press, 2004) has won acclaim from critics for its treatment of the issues facing the health care system and the pharmaceutical industry in particular. You can read more pieces by Merrill at  GoozNews, where this post first appeared.

By MERRILL GOOZNER

A lot of health care is wasted because it’s not very effective. David Leonhardt of the New York Times returned to that theme in a useful article in today’s paper. But when will economics writers with broad reach like Leonhardt begin writing about the bigger problem behind skyrocketing health care costs, and the one that’s more easily fixed — unjustified high prices for drugs, devices and procedures?

One need only review the past decade’s history of the pricing of drug-eluting stents, which are used during percutaneous coronary interventions to prevent further arterial blockages, to get a window onto the problem. They were introduced around 2003 at a price point — about $5,000 a stent — that was five times the bare metal stents they replaced. Continue reading “The Power of Negotiated Prices”

By MERRILL GOOZNER

By MERRILL GOOZNER

Joseph White, a professor of politics at Case Western Reserve University, made this interesting observation in his weekend column in The Fiscal Times:

“On most issues, there is no such thing as a stable “public opinion.” People do have general attitudes, beliefs that they can use to evaluate a choice. But often voters hold different attitudes that would lead to different evaluations of the same choice. How they answer a question depends on which considerations have been raised in their minds most recently.”

Therefore the analysts who predict Democratic defeats in November based on negative survey responses about health care reform now are making a fundamental error. The Republicans have shown great ability to raise considerations that push the evaluation in one direction. Yet some of that effort has been encouraged by the concerns conservative Democrats raised during the debate as they tried to make legislation better fit their preferences. They will not be making those arguments as they run for reelection. In the election campaign there would be far more spending on ads to defend the legislation. The press coverage may focus more on the actual provisions of the bill as opposed to the GOP charges. But focusing on the actual specifics will only be possible if there is a law that passed and can be defended. Democrats have to be able to point to something and say: “this is what we did, this is the truth about it, this is how it would help you.”

The Democrats also have to remember that the “losers who can’t deliver” consideration will be far more prominent in November if they pass nothing now. In short, the battle over interpretation of the health care reform effort has only begun. We do not know how it will turn out in November, but there are good reasons to believe the Democrats are better off fighting it with a new law in hand.”

Merrill Goozner has been writing about economics and health care for many years. The former chief economics correspondent for the Chicago Tribune, Merrill has written for a long list of publications including the New York Times, The American Prospect and The Washington Post. His most recent book, “The $800 Million Dollar Pill – The Truth Behind the Cost of New Drugs ” (University of California Press, 2004) has won acclaim from critics for its treatment of the issues facing the health care system and the pharmaceutical industry in particular. You can read more pieces by Merrill at  Gooznews.com.

By MERRILL GOOZNER

Charles Krauthammer’s columns in the Washington Post are like the Wall Street Journal editorial page, must-reading for anyone who wants to keep up with the illogical fulminations and small-minded cruelties of what passes for intellectual discourse on the right. The intellectual bankruptcy of today’s offering shows not only why health care reform should pass, but why it will.

After scolding President Obama for continuing to push for reform despite “electoral rebukes” in Massachusetts, New Jersey and Virginia, he complains that the cost-savings in the bill are “ridiculously insignificant.” Dismissing the popular support of the insurance industry reforms that would protect most Americans from the worst predations of the health care insurance marketplace, he goes on to describe the 30 million Americans who would get health coverage as unworthy recipients of taxpayer largesse. The half trillion dollars in Medicare “cuts,” he writes, are “not to keep Medicare solvent but to pay for the ice cream, steak and flowers.” Continue reading “The Oxymoron Columnist”

By MERRILL GOOZNER

Or Lubbock? Or Oklahoma City? Or New Orleans? Or any of a dozen major and minor metro areas throughout the South? According to the Medicare Payments Advisory Commission, all of them have significantly higher usage rates and costs per Medicare enrollee than McAllen, which was high-cost locale ground zero for Atul Gawande’s famous New Yorker article, “The Cost Conundrum,” which has become, to use the New York Times‘ formulation, “must reading in the White House.”

Gawande grounded his analysis on per-patient Medicare claims data compiled annually by researchers at Dartmouth Medical School. “The explosive trend in medical costs seems to have occurred here in an especially intense form,” Gawande wrote after the Dartmouth Atlas of Health showed McAllen as the highest spending region in the country outside Miami, where Medicare fraud is an especially virulent problem. Not so, MedPAC said. Adjust for prices and McAllen’s outlier status compared to the rest of Texas and large parts of the South all but disappears. Continue reading “McAllen, TX As Outlier? Why Not Houston?”

By MERRILL GOOZNER

As in, he spent a large part of his briefing in the White House press room talking about the fate of the health care reform bill. Here’s what he had to say about the summit with Republican and Democratic leaders, that’s still two weeks away:

Bipartisanship depends on a willingness among both Democrats and Republicans to put aside matters of party for the good of the country. I won’t hesitate to embrace a good idea from my friends in the minority party, but I also won’t hesitate to condemn what I consider to be obstinacy that’s rooted not in substantive disagreements but in political expedience.

To read the rest of President Obama’s thought on the current state of the health care reform debate, see the transcript, here.