Friday, December 7, 2018

OP-ED

OP-ED

Is Medical Imaging a Ricardian Derived Demand?

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By SAURABH JHA

Medical Imaging and the Price of Corn

After the Napoleonic wars, the price of corn in England became unaffordable. The landowners were blamed for the high price, which some believed was a result of the unreasonably high rents for farm land. Economist David Ricardo disagreed.

According to Ricardo, detractors had the directionality wrong. It was the scarcity of corn (the high demand relative to its supply) that induced demand for the most fertile land. That is, the rent did not increase the price of corn. The demand for corn raised the rent. Rent was a derived demand.

Directionality is important. Getting directionality wrong means crediting the rooster for sunrise and blaming umbrellas for thunderstorms. It also means that focusing on medical imaging will not touch healthcare costs if factors more upstream are at play.

Medical imaging is a derived demand. The demand for healthcare induces demand for imaging. Demand is assured by the unmoored extent to which we go for marginal increases in survival.

THCB Editorial on Trump’s Assault on the Press

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THCB isn’t a traditional newspaper or a traditional press outlet. But we do report on news and policy and we do host opinions from across the political and policy spectrum. Trump’s attacks on the press as “enemies of the people” and purveyors of “fake news” are the exact equivalent of the attacks on the press from totalitarian regimes down the ages. It pains me that we have to use any space or take any of our readers’ time to say this, but a free press is perhaps the most important bastion of democracy and freedom. It’s beyond belief that an American President is saying what Trump says. But his words have real consequences–journalists are regularly killed in Russia, Turkey and many other countries. The threats and language that are the precursors to that violence are starting to happen here too. So today, inspired by the Boston Globe,  THCB is one of thousands of traditional and new format media outlets standing together to say that enough is enough. Trump must stop his rhetoric and decent people must oppose what he says as loudly as they can.

As I’ve always suspected, Health Care = Communism + Frappuccinos

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By MATTHEW HOLT

Happy 15th birthday THCB! Yes, 15 years ago today this little blog opened for business and changed my life (and at least impacted a few others). Later this week we are going to celebrate and tell you a bit more about what the next 15 years (really?) of THCB might look like. But for now, I’m rerunning a few of my favorite pieces from the mid-2000s, the golden age of blogging. Today I present “Health Care = Communism + Frappuccinos”, one of my favorites about the relationship between government and private sector originally published here on Jan7, 2005. And like the Medicare one from last week, it sure holds true today. Matthew Holt

Those of you who think I’m an unreconstructed commie will correctly suspect that I’ve always discussed Marxism in my health care talks. You’d be amazed at how many audiences of hospital administrators in the mid-west know nothing about the integral essentials of Marx’s theory of history. And I really enjoy bring the light to them, especially when I manage to reference Mongolia 1919, managed care and Communism in the same bullet point.

While I’ve always been very proud of that one (err.. maybe you have to be there, but you could always hire me to come tell it!), even if I am jesting, there’s a really loose use of the concept of Marxism in this 2005 piece (reprinted in 2009) called A Prescription for Marxism in Foreign Policy from (apparently) libertarian-leaning Harvard professor Kenneth Rogoff. He opens with this little nugget:

“Karl Marx may have suffered a second death at the end of the last century, but look for a spirited comeback in this one. The next great battle between socialism and capitalism will be waged over human health and life expectancy. As rich countries grow richer, and as healthcare technology continues to improve, people will spend ever growing shares of their income on living longer and healthier lives.”

Actually he’s right that there will be a backlash against the (allegedly) market-based capitalism — which has actually been closer to all-out mercantilist booty capitalism — that we’re seen over the last couple of decades. History tends to be reactive and societies go through long periods of reaction to what’s been seen before. In fact the 1980-20?? (10-15?) period of “conservatism” is a reaction to the 1930-1980 period of social corporatism seen in most of the western world. And any period in which the inequality of wealth and income in one society continues to grow at the current rate will eventually invite a reaction–you can ask Louis XVI of France about that.

But when Rogoff is talking about Marxism in health care what he really means is that, because health care by definition will consume more and more of our societal resources, the arguments about the creation and distribution of health care products and services will look more like the arguments seen in the debates about how the government used to allocate resources for “guns versus butter” in the 1950s. These days we are supposed to believe that government blindly accepts letting “the market” rule, even if for vast sways of the economy the government clearly rules the market, which in turn means that those corporations with political influence set the rules and the budgets (quick now, it begins with an H…).

Information Blocking–The AHA Comments & PPR Responds

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The focus on the CMS rules on information blocking continues on THCB. We’ve heard from Adrian Gropper & Deborah Peel at Patients Privacy Rights, and from e-Patient Dave at SPM and Michael Millenson. Now Adrian Gropper summarizes — and in an linked article –notates on the American Hospital Association’s somewhat opposite perspective–Matthew Holt

It’s “all hands on deck” for hospitals as CMS ponders the definition and remedies for 21st Century Cures Act information blocking.

This annotated excerpt from the recent public comments on CMS–1694–P, Medicare Program; Hospital Inpatient Prospective Payment Systems…  analyzes the hospital strategy and exposes a campaign of FUD to derail HHS efforts toward a more patient-centered health records infrastructure.

Simply put, patient-directed health records sharing threatens the strategic manipulation of interoperability. When records are shared without patient consent under the HIPAA Treatment, Payment and Operations the hospital has almost total control.

Medicare Holds Out Promise of Health Record Access Revolution

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By MICHAEL MILLENSON

This is the second of two posts from the Society of Participatory Medicine about the important policy issue regarding portability of our medical records. The first provided background, with link to a PDF of the comments SPM submitted, largely authored by Michael Millenson, who provides this essay for context.

The Trump administration is proposing to use a powerful financial lever to push hospitals into making the patient’s electronic medical record interoperable – that is, readable by other care providers – and easily available to patients to download and organize via an app.

The possible new mandates, buried in a 479-page Federal Register “Notice of Proposed Rule Making” from the Centers for Medicare & Medicaid Services (CMS), could become part of hospital “conditions of participation” in Medicare. That means if you don’t do it, Medicare, which accounts for about a third of an average hospital’s revenues, can drop you from the program.

In a comment period that closed June 25, we at the Society for Participatory Medicine registered our strong support for taking the administration rhetoric heard earlier this year, when White House senior advisor Jared Kushner promised a “technological health care revolution centered on patients,” and putting it into practice. The American Hospital Association (AHA), on the other hand, while professing its support for the ultimate goals of interoperability and patient electronic access, was equally strong in telling CMS it was going too far, too fast and with too punitive an approach.

SPM’s comments on important proposed CMS interoperability rules

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By E-PATIENT DAVE DEBRONKART

This is the first of two posts from the Society of Participatory Medicine about an important policy issue regarding portability of our medical records. The second part will be published tomorrow and is written by Michael Millenson, who did the lion’s share of this work, as noted below.

Our Society’s Advocacy and Policy chair Vera Rulon @VRulon has submitted our comments on the proposed rules that have been discussed at great length on social media.

These regulations are a big deal for participatory medicine – they’re the successor to the Meaningful Use rules that have governed patient access to their chart, among other things. The regulations do this by altering how a hospital gets paid based on how well their data moves out of their computers. We want this; we believe it is essential in enabling patients and families to achieve the best possible care. (More on this in Millenson’s companion post.)

Not surprisingly, some hospitals don’t like new rules that affect how they get paid, and have lobbied heavily to NOT be required to give us our data. Some observers say there are ulterior motives – for instance see these 30 seconds of Yale cardiologist Harlan Krumholz at Connected Health 2016, on how a health system CEO told him flat out:

Social determinants on becoming a physician

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By SAURABH JHA

Poverty is known to be an important determinant of a person’s health and longevity. A person’s zip code is more relevant than genetic code. Does a physician’s zip code – that is where they were born and raised – have an effect on where they practice? Specifically, do rural born and raised physicians return to their rural roots? The story of Prashant, a physician raised in rural Bihar, India, is instructive.

When I first met Prashant, he was a second-year medical student in Patna Medical College and Hospital. Patna is the capital of Bihar, and Bihar is one of the poorest states in India.

Prashant brimmed with idealism and vigor. “I’ll practice in Purnea one day and serve the poor villagers,” he told me in broken English.

Prashant comes from a family of Bihari farmers who are also affluent landowners. He grew up near Purnea, a fourth-tier town in Bihar surrounded by villages. Visiting these villages is like stepping into a time machine – you can see people travelling by bullock carts but using mobile phones.

India’s Health Insurance Experiment. Who will be the winners?

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By SAURABH JHA

Though the exact cost of Modicare, the government’s extension of health insurance for poor people, estimated at one lakh crore (a trillion U.S. dollars), is open for debate, what is not disputable is that the cost of insuring India’s poor won’t fall with time. A sure way of accelerating healthcare inflation, that is speeding the rate of increase of healthcare costs, is by subsidizing or paying for health insurance. Insurance is like Newton’s Second Law of Motion – the velocity keeps increasing as long as the force is applied.

Healthcare is a peculiar industry. Cars get cheaper but medical care doesn’t. The Maruti eventually became cheaper than the Ambassador, and more aesthetically pleasing than its Neanderthalic predecessor. Medical care doesn’t get cheaper because a life saved from cancer is a life waiting to be killed by another disease, which needs treating, too. Survivors of cancer get heart attacks and survivors of heart attacks get cancer, and survivors of both get dementia.

It’s like a restaurant where you can’t just pay for lunch – if you pay for lunch you have to pay for breakfast and dinner and may be a few samosas in between the meals. But unlike eating, consumption of medical care is not guarded by satiety. The insatiable medical sciences keep delivering even more expensive ways death can marginally be deferred. For example, the once dreaded stroke which leads to paralysis is now treatable. However, the treatment is not cheap and comprises clot busters, dangerous drugs with fatal side effects. Further, to treat stroke you need rapid diagnosis by modern imaging – that is you need CAT scans and radiologists. If penicillin for pneumonia is like eating at a roadside dhaba, treatment for acute stroke is fine dining at the Taj.

Can Medicaid Expansion Survive?

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Amid fresh political rancor and legal machinations in the ongoing war over the Affordable Care Act (ACA), there’s a bright spot: Medicaid. At least for now.

This matters. True to predictions made by Obama and supporters when the ACA became law (2010), it has taken years and a lot of blood, sweat and tears to get to this moment.

As a reminder, the U.S. Supreme Court in 2012 ruled that states could opt out of the ACA’s Medicaid expansion—leaving each state’s decision to participate in the hands of governors and state lawmakers.

On June 7, after a 4-year pitched political battle, Virginia became the 33rd state (plus DC) to expand Medicaid under the ACA. The Virginia expansion is projected to encompass 400,000 low-income Virginians.

The state swung in favor of expansion after Democrats gained the governorship and more seats in the legislature in 2016. But, importantly, key moderate Republicans relented.

Four other non-expansion states could join Virginia over the next year or two. They are Maine, Idaho, Utah, and Nebraska.

Misdiagnosis: Obamacare Tried to Fix the Wrong Things and Prescribed the Wrong Treatments

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Today THCB is happy to publish a piece reflecting the learnings from Charles Silver and David Hyman’s forthcoming book Overcharged: Why Americans Pay Too Much For Health Care, shortly to be published by the libertarian leaning Cato Institute. In subsequent weeks we’ll feature commentary from the right radical libertarian zone on the political game board (Michael Cannon) and from the left (Andy Slavitt) about the book and its proposals. For now please give your views in the comments–Matthew Holt

There are many reasons why the United States is “the most expensive place in the world to get sick.” In Part 1 of Overcharged: Why Americans Pay Too Much For Health Care, we show that the main reason is that we pay for medical treatments the wrong way. Instead of having consumers purchase these treatments directly, we route trillions of dollars through third-parties payers – both government and private insurers.

Relying on third party payers has many consequences — few of them good. To start with, this arrangement removes the budgetary constraint that would otherwise cap the amount consumers are willing to spend. By minimizing the direct cost of treatments at the point of sale, third party payment arrangements alter everyone’s incentives fundamentally. Consumers no longer need worry about balancing marginal costs against marginal benefits; instead, they have an incentive to use all treatments that have any potential to help, regardless of their prices. When millions of consumers act on these incentives, total spending skyrockets and consumers collectively wind up worse off, because their fixed costs spiral upward too. Heavy reliance on third party payers creates a classic failure of collective action.

It isn’t just consumers. Providers love third party payment as well. And why not? Once providers have access to the enormous bank accounts of third party payers, the sky is the limit, at least until third party payers start setting limits on the amounts they will pay and saying no to unproven and/or cost-ineffective treatments that doctors want to provide and patients want to receive.

Not surprisingly, it has turned out to be extraordinarily difficult and politically unpopular for third party payers to set such limits. Obamacare’s appeal derives largely from two requirements: health insurance plans must accept all comers, including applicants with preexisting conditions that require expensive medical treatments; and health plans must provide unlimited benefits (i.e., no annual or lifetime spending caps). From an individual consumer’s perspective, what could be better than having access to unlimited amounts of money to spend on medical needs? From society’s point of view, though, this combination is a recipe for disaster.