The ever-blurring line between the practice of medicine and the business of profiting from unhealthy lifestyles was crossed again Wednesday, as Aetna announced a collaboration with two pharmaceutical companies to pitch their prescription weight loss drugs to selected Aetna members.
This announcement crosses multiple lines, not just one. First, no insurer has ever announced that it would openly direct a specific class of members to use particular proprietary drugs. Disease management (DM) programs rarely recommend specific drugs, and certainly in the exceptionally rare instances when they do, the recommendations are not specific brand-name drugs (in this case, Arena’s Belviq and Vivus’s Qsymia).
Instead, DM focuses on improving compliance with existing drug regimens, and DM firms encourage members “talk to their doctor” about changing therapies. While DM companies shy away from directing patients to specific products, physicians and pharmacists have discretion to discuss the full range of covered generic and brand products with patients, in order to optimize therapy and close algorithm-identified care gaps.
Second, there are no generally accepted care algorithms (other than those created by the manufacturers of those products) for these two drugs in the treatment of obesity. So there is no “gap” to fill. If there were an accepted protocol, these drugs might be blockbusters but instead Belviq’s recent quarterly sales were an anemic $4.8-million, “well below even reduced Wall Street expectations,” while QSymia sales are “flailing” at $6.4-million for the same period.
Obese people and their physicians seem to be avoiding these drugs in droves. Regardless of what Aetna and the manufacturers believe about their effectiveness, or whatever promotional deal they’ve cut, market reaction is telling a different story, and unfortunately for Aetna, Vivus, and Arena we live in a market economy.
Continue reading “Dr. Aetna Will See You Now”
Filed Under: THCB
Tagged: Aetna, Al Lewis, Belviq, Disease Management, Obesity, Pharma, Qysmia, Vik Khanna, Wellness
Jan 15, 2014
It’s officially the holiday season, which means 70,000 people have temporary jobs at Amazon fulfillment centers to ensure that your gifts arrive exactly when they’re supposed to. While these jobs aren’t exactly easy or high-paying – there’s been plenty written about the not-so-awesome working conditions – it’s in many ways remarkable that Amazon is able to easily leverage the population of a small town less than 15 years after a panic-filled Thanksgiving led to the mammoth and tightly-controlled supply chain system that’s in place today.
The “Save Santa” incident, described in Businessweek reporter Brad Stone’s recent book The Everything Store: Jeff Bezos and the Age of Amazon, was an “all-hands-on-deck emergency” in 1998 resulting from one of the biggest problems an online store can have: there were far more orders coming in than shipments going out. This required all employees – including the executives – to work a graveyard shift at one of two warehouses. “They brought their friends and family,” writes Stone, “ate burritos and drank coffee from a food cart, and often slept in their cars before going to work the next day.” Bezos held contests to see who could pick items off shelves the fastest. Then he vowed the company would never have an inventory shortage again.
“The underlying truth is that Amazon becomes, like almost like all retailers, a different company during the holidays,” Stone explained to me over the phone. “Volume grows over the previous year. The already aggressive and fast-moving environment in the headquarters and fulfillment centers become manic. I describe it as two Amazons: one that operates for 10 months and the other that operates for two months out of the year.”
Continue reading “How One Bad Thanksgiving Shaped Amazon”
Filed Under: Tech, THCB
Tagged: Amazon, Gretchen Gavett, Pharma
Dec 2, 2013
… and a call to action. This case study is based on my meeting with the Center for Health Information and Analysis (CHIA) in my home state. CHIA is an all payers claims database, a massive collection of diagnoses, locations, dates and prices for all of your health services across all of your providers and insurers. Whether it’s claims or health records, almost every state and many private clearing houses are setting up to monitor you.
Your information can be used by business to manipulate prices for maximum profit, or by you to inform your choice of health insurance plans and health care providers.
Unfortunately, business can get your information but you can’t. This reflects an industry strategy to obstruct the market-based features of the Affordable Care Act. I hope you will take this case study, edit it, and file it with the Attorney General and Governor in your state to ask for your data as a consumer protection issue. That’s what I’m about to do.
My state is #1! Go Massachusetts! My state is #1 in health care costs. It’s also #1 in implementing a health insurance exchange (Romneycare 2006) and a leader in state surveillance with the 2012 cost containment law known as Chapter 224. Chapter 224 mandates various state surveillance mechanisms including a health information exchange that monitors encounters and an all payer claims database called “the center”.
The cost containment law also includes some consumer protections. Line 1909 states:
“To the maximum extent feasible, the center shall also make data available to health care consumers, on a timely basis and in an easily readable and understandable format, data on health care services they have personally received.”
Although the state surveillance is in place, and the price fixing that keeps us #1 is ongoing, the consumer protection part of the law is not implemented. So, I took the opportunity to meet with the executive director of CHIA and their chief legal counsel and get the scoop on why the state is not following the law. To paraphrase their explanation: “It’s too hard.”
Continue reading “State Surveillance Endangers the Affordable Care Act: A Case Study”
Filed Under: THCB
Tagged: Adrian Gropper, Center for Health Information & Analysis (CHIA), Consumer Directed Healthcare, Health Insurance Exchanges, Health Plans, Massachusetts, Pharma, The ACA, The States
Oct 18, 2013
Will all the White House messages, the stream of breathless Twitter updates on the number of hits and enrollments, and the press hype surrounding opening day send the uninsured public into panic mode? Will they prompt buyers to consider only the premium and click to enroll ASAP? And why not? For weeks the administration, state exchange officials and supporters of the Affordable Care Act have been telling the public how cheap premiums will be — much cheaper than expected.
A Pennsylvania woman told me she was chomping at the bit to enroll because she was eager to dump her policy from Aetna for a cheaper model from Blue Cross. Never mind that she had no idea whether the coverage was better, the same, or worse.
A Nebraska woman heard there was a worksheet to fill out and it had to be completed by October 1. It was first-come-first-served, an agent had told her.
If cheap premiums were the only thing shoppers had to consider, this sense of urgency might be fine. But it’s not. Here’s the problem.
Selecting a health insurance policy is fraught with potential missteps and misunderstandings. As the Nebraska woman told me, “You’re walking into a chasm of uncertainty. It’s like shopping for a used car. You don’t know if you’re getting a lemon,” a lemon you’re stuck with until the next open enrollment.
For consumers, the key advice right now is: don’t rush into anything. Tuesday, October 1st marked the first day of a six-month open enrollment period, not the last. Coverage doesn’t even begin until January 1, 2014, so there’s no need to buy the first policy you see. If you do want coverage on January 1, the deadline for enrolling is Dec 15.
Continue reading “Of Course, Then There’s The Fact That You May Be Better Off Waiting To Buy Coverage, Anyway …”
Filed Under: Uncategorized
Tagged: Health Insurance Exchanges, Health Plans, Pharma, Premiums, The ACA, Trudy Lieberman
Oct 13, 2013
All of the state health insurance marketplaces (also known as exchanges) are online, but millions of expected users may have a hard time finding them. Marketplaces will enable shopping and enrollment mainly through their websites. States are using a variety of promotional strategies, but most people will likely find marketplaces in the same way they find other websites—through common keyword searches on Google, by far the nation’s dominant search engine. Poor search engine results can create serious barriers to shopping and enrollment, the major measures of success for marketplaces and, by extension, the success of the Affordable Care Act (ACA).
We used standard methods to assess Google results for the 17 marketplaces operated by 16 states and Washington, DC that offer individuals, families, and small businesses a place to shop for health care coverage. Over three days in mid-September, we looked at results for keywords that data from Google show people are commonly using to search for health insurance. We examined both unpaid (or “organic”) and paid (or “sponsored”) results. Although research shows that unpaid results get more attention, paid results can also lead to page views.
Our preliminary findings show that marketplaces for four states—Idaho, Maryland, New Mexico, and New York—and Washington, DC did not appear on the first page of Google results, which generates 92% of all page views. In addition, both unpaid and paid search results for most of the remaining 12 states were frequently absent from page one.
With enrollment in the marketplaces opening October 1 for coverage beginning January 1, this would be a good time to focus on search engine optimization (SEO), the process of increasing the rankings of unpaid or “organic” search results. Once implemented, SEO results can be seen quickly, especially for a topic as popular and important as new health insurance options. However, it requires analysis, planning, and time to implement.
Methods for Conducting Search Engine Result Testing
To test search engine results for state-operated health insurance marketplaces, we used the five keywords most effective in producing page views of a prominent healthcare-related website produced by a federal client: Affordable Care Act, affordable health care, health care, health insurance, and Medicaid.
Continue reading “Not Quite Ready For Prime Time: The State Health Insurance Marketplaces and Google”
Filed Under: Uncategorized
Tagged: David McCormick, Elaine K. Swift, Google Search, Health Insurance Exchanges, Health Plans, Pharma, Search Engine Optimization (SEO), The ACA, The States
Sep 17, 2013
The FTC has found that healthcare fraud has been on the rise lately, and will likely continue to increase until October. Let’s talk about how to spot the scams and avoid any problems when you’re ready to make the switch over to Obamacare.
The Obamacare Card Scam
One of the most popular healthcare scams that’s been circulating as October 1st approaches is known as the “Obamacare card.” It’s a technique used by fraudsters to steal consumers’ credit card information and social security numbers.
How does the Obamacare card scam work? Basically, victims get a phone call from someone claiming to represent the government. The caller informs them that they need this insurance card to be eligible for coverage under the Affordable Care Act, or they may say the Obamacare card provides extra discounts. They ask for private personal information so they can send you the card.
But there’s no such thing as an Obamacare card — you’re just giving your info to scammers and identity thieves.
The health insurance marketplace goes into effect in October, and the FTC expects the number of related scams to rise in the meantime.
The Information Update Scam
Another popular scam involves fraudsters posing as Medicare officials. These fake Medicare representatives call consumers and say they’re updating or verifying personal information. The consumers are told that they might face some sort of consequence if they don’t comply.
The Sacramento Bee has more:
“…impostors claiming to be from Medicare told consumers they needed to hand over their personal or financial information in order to continue eligibility because ‘change is on the horizon.’
But nothing in the Affordable Care Act threatens existing benefits or medicare Enrollees…”
In other words, you shouldn’t be getting any Medicare calls because of the Affordable Care Act. If you have concerns about your Medicare benefits, don’t respond to a cold-caller. Instead, contact your Medicare representatives directly.
Continue reading “What You Need to Know About Obamacare Scams”
Filed Under: Uncategorized
Tagged: Health Care Reform, insurance fraud, Medicare, Obamacare, Pharma, Sean Boulger, The ACA
Jul 17, 2013
NEHI recently convened a meeting on health care innovation policy at which the Harvard economist David Cutler noted that debate over innovation has shifted greatly in the last decade. Not that long-running debates about the FDA, regulatory approvals, and drug and medical device development have gone away: far from it.
But these concerns are now matched or overshadowed by demands for proven value, proven outcomes and, increasingly, the Triple Aim, health care’s analog to the “faster, better, cheaper” goal associated with Moore’s Law.
To paraphrase Cutler, the market is demanding that cost come out of the system, that patient outcomes be held harmless if not improved, and it is demanding innovation that will do all this at once. Innovation in U.S. health care is no longer just about meeting unmet medical need. It is about improving productivity and efficiency as well.
In this new environment it‘s the science-driven innovators (the pharma, biotech, and medtech people) who seem like the old school players, despite their immersion in truly revolutionary fields such as genomic medicine. It’s the tech-driven innovators (the healthcare IT, predictive analytics, process redesign, practice transformation and mobile health people) who are the cool kids grabbing the attention and a good deal of the new money.
To make matters worse for pharma, biotech and medtech, long-held assumptions about our national commitment to science-driven innovation seem to be dissolving. There’s little hope for reversing significant cuts to the National Institutes of Health. User fee revenues painstakingly negotiated with the FDA just last year have only barely escaped sequestration this year. Bold initiatives like the Human Genome Project seem a distant memory; indeed, President Obama’s recently announced brain mapping project seems to barely register with the public and Congress.
Continue reading “Science-Driven Innovation and Tech-Driven Innovation: A Marriage of Convenience or a Marriage Made in Heaven?”
Filed Under: Tech, THCB, The Business of Health Care
Tagged: Big Data, Biotech, clinical research, Innovation, Medical Devices, NEHI, Pharma, Tom Hubbard, Triple Aim
Jul 9, 2013
Over past few years, we’ve seen numerous articles about impact of the environment changes on the health of our population. They range from increased rates and severity of respiratory disease to the resurgence of infectious diseases due to increasing temperatures. However, it hadn’t really occurred to me until this weekend while attending a film festival in Colorado (name undisclosed because I don’t want it to get more crowded!) that there were interesting parallels between the environmental and health care reform movements.
And while this should probably not be a surprise given that healthcare and the environment are two of the most “wicked problems” facing our country – tough to describe, multiple causes and not easily solved with one answer – I nevertheless was intrigued by the similarities.
1) Local, local, local– The environmental movement has finally figured out that change will only occur if you make the issues local – it’s not just about the planet but about your backyard. (My father who could not hear me utter the word climate change without breaking into hives or leaving the room, recently told me he thinks “something may be happening because the fish in the river he spends half his days on are starting to die”) Those of us in healthcare have known forever that the organization, delivery and financing of healthcare is local. And while the biggest changes over the past few years have been driven by government policy, the tough part lies ahead and will only be successful because of the actions at the local level.
2) Show me the money- Whether it’s the environment or healthcare – until it impacts the consumer’s bottom line (property damage, rising gas prices, higher out of pocket expenses), it can be tough to get a majority of people to devote their time and energy to change. In healthcare we are still in the early days but are starting to see the impact of people having to pay more out of pocket for their medical care. Time will tell whether the impact is all positive, but at least we are recognizing that financial incentives can play a key role in changing behavior.
Continue reading “What Health Reform Can Learn from the Environmental Movement”
Filed Under: The Business of Health Care
Tagged: Environment, Health Care Reform, Health Habits, InterWest Partners, Investors, Michelle Snyder, Pharma
Jun 20, 2013
Purchasers of health care, long-time supporters of organized systems of care, are watching with growing alarm as horizontal and vertical mergers between providers accelerate. Buyers with experience in other sectors understand that consolidation can improve efficiency, quality, and the generation of capital, especially where there is excess capacity and abundant waste. They are equally aware, however, that ‘over’-consolidation can lead to pricing power, the absence of competition, and the crowding out of disruptive innovations.
Catalyst for Payment Reform(CPR), a non-profit working on behalf of large employers and public health care purchasers to improve the quality and affordability of health care through payment innovation, convened a National Summit on Provider Market Power on June 11th in Washington D.C.
There, the nation’s leading experts discussed and debated how to maintain enough competition among health care providers to stimulate improvements in the delivery and affordability of care.
Participating experts stated that by as early as 2006, over 75% of U.S. metropolitan statistical areas (MSAs) had experienced enough hospital mergers to be considered ‘highly consolidated’ – a trend that continues. Economists agreed that the evidence demonstrates that highly-consolidated providers can raise prices considerably. Provider leaders offered their views on why consolidation is occurring, including to meet the demands for integration and efficiency, to counterbalance a highly-consolidated health insurance market, and to have enough income to invest in IT systems and other infrastructure necessary for population management.
Continue reading “Will “Too Big to Fail” Come to Health Care?”
Filed Under: THCB, The Business of Health Care
Tagged: affordability of care, Catalyst for Payment Reform, Competition, Employers, health care providers, Pharma, Robert S. Galvin
Jun 11, 2013
The recent Medicare report on variation in hospital “prices” is not exactly news. In fact, I wonder why anyone (including the NY Times and NPR) covered it, let alone make it a lead story.
As you probably know, Medicare reported that hospital charges for specific treatments, such as joint replacement surgery, greatly vary from one hospital to another. (This includes charges for all services during the hospitalization, including room charges, drugs, tests, therapy visits, etc.) Everyone in the healthcare business knows that charges do not equal the actual prices paid to hospitals, no more than automobile sticker prices equal the prices that car buyers actually pay. Except that for the past thirty years, the gap for hospitals greatly exceeds (in percentage terms) the gap for cars. This is not just a nonstory, it is an old nonstory.
So reporters tried to give it a new spin. One angle concerns the uninsured, who may have to pay full charges. I will write about this in a future blog. Another angle is that by publishing these charges, Medicare will encourage patients to shop around. That is the subject of this blog.
I suppose it is okay to tell patients that the amount they might have to pay out of their own pockets may vary from one hospital to the next. But the published charge data is useless for computing out of pocket payments; in fact, it may be worse than useless. As even the NY Times noted, insured patients make copayments based on prices that their insurers negotiate with hospitals. These prices are essentially uncorrelated with charges. So a patient who visits a hospital with low charges may well make higher out-of-pocket payments than a patient who visits a high charge hospital. It is a crap shoot.
Continue reading “The Rest of the Story About Hospital Pricing”
Filed Under: Economics, OP-ED, THCB, The Business of Health Care
Tagged: bitter pill, CMS, Costs, David Dranove, Hospitals, Pharma, Price controls, The ACA, Transparency
May 9, 2013