OP-ED

OP-ED

Pharma and Volume-to-Value: The Big Throwdown

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Joe FlowerThe collision between the “volume-to-value” movement and the pharmaceutical and biotech industries over the next few years will have a powerful impact on them and on the healthcare industry and on us as customers, patients, and payers. 

On the one hand, pharma is perhaps the part of the healthcare industry least exposed to direct price regulation under the Obama reforms. The actual costs of pharmaceuticals have been rising as a percentage of what people spend on healthcare, and are seen as the part they have the least influence on. At the same time, many new drugs for cancer and other life-threatening diseases have come with astonishingly high price tags, often not fully covered by insurance (due to the high deductibles and co-pays of the new plans), and with few ways for regulators or the market to push back on them. The public perceives these huge price tags as threatening people with a Hobson’s choice of bankruptcy or death. In the volatile political atmosphere of the 2016 elections, this leaves the pharmaceutical industry highly exposed to political attack and actual new price regulation.

On the other hand, the pharmaceutical and biotech industries also potentially offer some of the best answers to bringing the cost of healthcare down through the use of personalized medicines, smart medicines, new methods of administration such as implants, as well as the possibilities glimmering at us from recent research of real breakthroughs in such important chronic disease areas as Alzheimers, diabetes, addiction, behavioral medicine, and functional medicine. For the most part, though, these answers remain potential. We will not see them adding to the “value” side of the equation until they become fully integrated into a system that is at risk for the health of its customers and using every trick in the handbook to bring those costs in line.

ONC Report on Health Information Blocking: A Solid Double, But NOT a Home Run

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flying cadeuciiLast Friday ONC (the Office of the National Coordinator for Health IT) released a long-awaited Report On Health Information Blocking. The ONC blog capsulizes the report:

Health information blocking occurs when persons or entities knowingly and unreasonably interfere with the exchange or use of electronic health information. Our report examines the known extent of information blocking, provides criteria for identifying and distinguishing it from other barriers to interoperability, and describes steps the federal government and the private sector can take to deter this conduct.

We were struck with two major reactions to the ONC Info Blocking Report:

  • It’s a solid double: it does a credible job of recognizing that the major problems of interoperability and blocking are not technical or due to a lack of standards, but rather due to business practices and business models. The report also proposes a baseline of potential solutions.
  • It’s not a home run: the report misses the opportunity to describe a comprehensive approach to combat information blocking.

The Facebook Model for Socialized Health Care

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Screen Shot 2015-02-26 at 5.06.17 PMAs government involvement in U.S. health care deepens—through the Affordable Care Act, Meaningful Use, and the continued revisions and expansions of Medicaid and Medicare—the politically electric watchword is “socialism.”

Online, of course, social media is not a latent communist threat, but rather the most popular destination for internet users around the world.

People, whether out of fear for being left behind, or simply tickled by the ease with which they can publicize their lives, have been sharing every element of their public (and very often, their private) lives with ever-increasing zeal. Pictures, videos, by-the-minute commentary and updates, idle musings, blogs—the means by which people broadcast themselves are as numerous and diverse as sites on the web itself.

Even as the public decries government spying programs and panics at the news of the latest massive data-breach, the daily traffic to sites like Facebook and Twitter—especially through mobile devices—not only stays high, but continues to grow. These sites are designed around users volunteering personal information, from work and education information, to preferences in music, movies, politics, and even romantic partners.

So why not health data?

Value-Based Reform

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Cochran THCBThe U.S. Department of Health and Human Services’ recent announcement to move the Medicare program toward value-based payments is among the most promising recent developments in health care.

While changing the way we pay for care will not be easy, we believe that shifting away from fee-for-service to value-based payments could be a catalyst to a better, more affordable health care system in our country.

Three Benefits of Paying for Quality
There are numerous potential benefits to paying for quality rather than quantity, including the three we want to focus on today.

  1. We believe this payment shift has the potential to accelerate progress toward achieving the Triple Aim – defined as better individual care, better population care, and lower cost.
  2. We believe the payment shift by Medicare will accelerate the transition to value-based payments among commercial insurers – a major benefit to employers in terms of improved health for employees and greater affordability.
  3. We believe value-based payments have the potential to help slow – and possibly reverse – the epidemic of physician burnout in the United States, particularly among primary care doctors.

A Guide to Top Medical Journals: A Primer For Journalists

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Charles Ornstein is an award-winning healthcare journalist who recently wrote an article in the Boston Globe about an ongoing controversy regarding a top medical publication. Yet Ornstein still wonders about the current status of medical journals:

To help answer Mr. Ornstein’s query, I have asked the editors of top medical journals to submit responses to a simple questionnaire. Here are their answers.

BMJ

What would an alternative title to your journal be? The Journal of Transparent Research

What is your tag line? “Leading the charge against conflicts of interest

What happened at your most recent editorial staff meeting? We discussed possible strategic partnerships with healthcare journalists to get Freedom-of-Information-Act orders. Independent observers should be able to get patient-level research data released from the clutches of industry and their puppet scientists and journals.

Are Employers to Blame For Our High Medical Prices?

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In a recent New York Times blog, Uwe Reinhardt places much of the blame for high and rising medical prices on passive employers. He argues that employers should work just as hard to reduce healthcare benefit costs as they work to reduce other input costs. But he then observes:

“One reason for the employers’ passivity in paying health care bills may be that they know, or should know, that the fringe benefits they purchase for their employees ultimately come out of the employees’ total pay package. In a sense, employers behave like pickpockets who take from their employees’ wallets and with the money lifted purchase goodies for their employees.”

I think that Reinhardt gets the economics wrong here and, in the process, he puts too much of the blame on employers. Reinhardt is right in one respect – employees care about their entire wage/benefit packages. If benefits deteriorate, employers will have to increase wages to retain workers. Thus, it seems that if an employer reduces benefit costs, it must increase wages by an equal amount. If that is true, we can understand why employers are passive.

The correct economic argument is a bit more nuanced. Employees do not care about the cost of their benefits; they care about the benefits. If an employer can procure the same benefits at a lower cost, the employer need not increase wages one iota. In this regard, there is nothing special about health benefits. Suppose an employer offers employees the use of company cars. Workers don’t care what the employer paid for the cars, and if the employer can purchase cars at a deep discount, it will pocket the savings.

America’s Health and The 2016 Election: An Unexpected Connection

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Donald Trump’s stunning upset victory has occasioned a lot of searching among political analysts for an underlying explanation for the unexpected turn in voter sentiment. Many point to Trump’s galvanizing support among white working class and middle income Americans in economically depressed regions of the US- particularly Appalachia and the upper middle west “Rust Belt” – as the main factor that put him in office.

While the Democrats concentrated on the so-called “coalition of the ascendant”- voter groups like Hispanics and Millennials that are growing, Trump rode to victory on a “coalition of the forgotten”- working class Americans in economically depressed regions of the U.S. who had been left behind by the economic expansion of the past seven years.

When the Economist searched for a more powerful predictor of the Trump victory than white non-college status, they found a surprise winner: a composite measure of poor health (comprised of diabetes prevalence, heavy alcohol consumption, lack of physical activity, obesity and life expectancy). Believe it or not. this measure of health status predicted a remarkable 43% of the improvement of Trump’s vote percentage compared with the 2012 Republican candidate Mitt Romney, compared to 41% for white/non-college.

A month after the election, the Centers for Disease Control released its 2015 morbidity and mortality trends in the US.  The CDC Report showed that  Americans’ life expectancy actually declined for the first time in 22 years. Except for cancer where we saw continued progress, death rates rose for eight out of the ten leading causes of death, most sharply for Alzheimer’s Disease.  The decline in life expectancy was confined entirely to the under 65 population!

Do Asians Have Harder Heads? On Sports Concussions and the Need For a Fairer, Medical Research Funding Policy

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At a January event on “The Future of Baseball” organized by the Sports and Society Program at NYU’s School of Professional Studies, Yankees executive Jean Afterman spoke to the superiority of baseball over football by noting that “at least our athletes don’t have to worry about their heads after they’re done.”  It was an innocuous statement but one that points to a growing assumption that sports concussion is both (a) prevalent and (b) a debilitating disease to be feared.

But is it true that sports concussions are the public health scourge of our time?  Media coverage would make it seem so, with countless stories dedicated to professional athletes suffering through pain and dementia, youthful athletes retiring for fear of brain injury, and billion dollar lawsuits against the NFL.

You Won’t Believe What Medicare Just Did on Patient Engagement!

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Sure, I’ve always wanted to write a clickbait headline that sounds like a promo for the bastard child of Buzzfeed and the Federal Register. But, seriously: you will not believe what Medicare just did about patient engagement in a draft new rule dramatically changing how doctors are paid.

And, depending upon the reaction of the patient community, you definitely won’t believe what happens next.

Congress Needs to do Something About Data Blocking Now

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flying cadeuciiNow it’s clear. On Thursday, the Office for Civil Rights, responsible for HIPAA enforcement and protecting the public, published a new guidance to interpret HIPAA with respect to data blocking. The limits of the current law are now evident. In the interest of affordable health care, the Precision Medicine Initiative, and common sense, it’s time for Congress update HIPAA. Believe it or not, HIPAA still allows hospitals and other electronic health record (EHR) systems to require paper forms before they release data under patient direction. Along with an allowed 30-day delay in access to electronic health records, this data blocking makes second opinions and price comparisons practically inaccessible. Over $30B in stimulus funds have been spent on EHRs and now it is still up to Congress to give to patients full digital access to digital data.

Data blocking is the result of deliberate barriers designed into current EHRs that prevent patients being able to use their own data in efficient and innovative ways. It is practiced by both EHR vendors and healthcare institutions to avoid competition by favoring the services they control. As hospitals consolidate into massive “integrated delivery networks”, the business logic for data blocking becomes clear and irrefutable. Data blocking ensures the largest health delivery networks will get larger and control pricing. The bigger they are, the more data they have about each patient and the more money each patient’s data is worth to outside interests like pharmaceutical companies and data brokers. The results are ruinous healthcare costs and hidden discrimination in insurance, credit, employment, and other key life opportunities.