Wednesday, December 13, 2017
Blog Page 1008

DISEASE MANAGEMENT: Health-e-technologies Initiative launches

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At the tail end of last week the RWJ-funded Health-e-technologies Initiative organization gave out its first round of grants.  Many of the subjects looked familiar to those of us who’ve spent time in the (nominally) for-profit eHealth sector.  For instance, Kate Lorig at Stanford who’s already running a huge study on self-treatment among arthritis patients will do a clinical trial by randomizing a sub-set of diabetics into either a web-based set of self-management classes or a control group.  Barbara Rimer at UNC is studying the effectiveness of cancer lit-servs.

Back in the mid-1990s several people were looking at these kinds of interventions having heard good things anecdotally about their effectiveness. For example, back in 1996 I had a cancer patient who was active online come and talk to my health care IT client group to show them what was happening in the on-line patient community. There is also lots of anecdotal evidence from work being done with online self-management programs, and even some real studies. So in some ways these studies are old news.  However, theoretically a health care product or service’s introduction  should go in the order A) Initial use and pilots, B) Clinical study (if possible RCT) C) Market development and adoption.

In the case of these  IT-based self-treatment technologies, by 1997-8 the eHealth market fever had taken over and soon there was a software package and web site for every condition. No one did any clinical trials to see what worked (mind you that’s equally true for most new surgical procedures).  Now it looks like the clinical trials are going to get done.  Presuming that they show that eHealth self-care works, hopefully the lack of funding from Medicare and private insurers that delayed the emergence of eHealth in practice (rather than its emergence on the stock market in the bubble years) will be resolved. (Some companies like Lifemasters and American Healthways have been growing recently, but it’s been a decade of tough sledding, and most of their business is call center-based). After all, if web-based self-care makes patients better and saves money, it’ll be that much harder to deny it a CPT code.

Meanwhile, the Health-e-initiative has launched a discussion-based web site. It’s worth taking a look, and you can post if you like (not that I’ve got round to doing that yet).

POLICY: Fraud in Medi-Cal, by Matt Quinn

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Guest contributor Matt Quinn reports from THCB’s Sacramento Bureau.  After reading his article, cogitate on this question. D’you think that a newcomer to the California political scene, elected Governor on a "platform" of cutting government bureaucracy, might find this information the basis for some (assume thick Austrian accent here) "full auditing"?

On Thursday a grand jury indicted two LA residents on Medi-Cal fraud charges totaling $40 million, the largest fraud case ever filed by the U.S. attorney’s office in Sacramento. The couple are charged with "stealing doctors’ and patients’ identities to bill the programs for laboratory tests, drugs and medical supplies that were never provided and for services that were exaggerated or provided by unlicensed personnel from 1996 to 2000. According to the indictment, ‘[a]lthough the patients did not see a doctor or receive any treatment or services,’ the defendants submitted bills ‘as if those individuals had been to an office visit.’ "

While this might seem like a momentous blow against the forces arrayed to defraud Medi-Cal, it hardly amounts to a drop in the bucket.   A recent study conducted by the Orange County Register estimates that 10-35% of the $29.2 billion Medi-Cal budget, which provides coverage to about 6.8 million residents, could be fraudulent.  And that most of the fraud was conducted by providers (or "fake providers") and not beneficiaries.  As in this case, the most common Medi-Cal fraud tactics include "inflated bills, false tests and bills for services not performed", according to the Register article. 

So why is Medi-Cal so easy to defraud…or at least get away with defrauding?  First, there are many, many Medi-Cal providers and not enough people to oversee them.  Within the Department of Justice Bureau of Medi-Cal Fraud and Elder Abuse, an agency that deals with fraud, 411, or 42%, of the current 973 pending fraud probes are not being investigated.  They report that anti-fraud efforts are "underfunded or overwhelmed, or both."

Next, Medi-Cal fraud is often not readily apparent, even with the recently revised enrollment guidelines and routine of provider re-enrollments and on-site reviews by the Department of Health Services, the agency that administers Medi-Cal.  When enrolled Medi-Cal providers correctly bill for services not actually performed on legitimate Medi-Cal enrollees and have the (legitimate looking but fake) purchase records for supplies and (legitimate looking but fake) medical records to back them up, it takes in-depth investigation, interviews with beneficiaries – in other words, plenty of resources – to find most fraud.  A 60 Minutes broadcast a couple of years ago exposed the industry that provides (mostly DME providers) with the fake billing records to back of the millions of dollars for orthotics and braces that they were billing Medi-Cal.  Sophisticated criminals, lots of money and not enough oversight  results in lots of fraud.

Finally, (and perhaps most disturbingly), the report detailing the billions of dollars of taxpayer money being looted by Medi-Cal fraud "went all but unnoticed in the Capitol," according to the Register report.  While I’m sure that the state of California couldn’t use an extra $3 – 10 billion right now (not that Gray Davis did, as I remember, propose to beef up the funding/staffing for investigators), I wonder why this isn’t a bigger issue.  As this case demonstrates, tens (hundreds?) of millions of dollars can be found without even looking into how doctors practice medicine (i.e. the realm of clinical quality, evidence-based medicine, and other touchy subjects).

UPCOMING: Clinical wireless and PDA use

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This is the first in an occasional post to let you know what I’m working on behind the scenes. I’m trying to get to grips with the huge topic of wireless computer use by clinicians.  If you have access either to any recent data about this topic, or are privy to (or actually using) any interesting use of clinical PDAs, tablets, laptops, etc, etc, in a clinical setting, especially if it combines Wi-Fi with WAN, please email me.  Thanks.

I’m hoping to get this piece out on THCB  in the next week or two (i.e. if I impose a vague but public deadline upon myself, it might actually happen!).

TECHNOLOGY: What’s behind WebMD missing its numbers?

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This morning WebMD, the de facto giant of the transaction processing and physician office software markets, announced that its earnings and revenues for the next two quarters will be below expectations.  The stock price traded down about 10% in early trading.

What’s puzzling is that this shortfall is due to lower than expected  revenue growth. Most analysis (such as cited in this post) seems to be showing that IT spending in health care is increasing quite fast. Consensus forecasts for WebMD had been 13% annual revenue growth to about $1.1 billion. However, that number will be significantly lower, and revenue growth is likely to be in the single digits. What’s problematic for Wall Street is that WebMD has done most of the reorganization and cost-cutting that it needed to after its chaotic emergence from the Internet bubble. (For more on that and WebMD’s structure see this post). Plus the new numbers do not include any impact from the smoldering DOJ investigation into accounting irregularities at Medical Manager before WebMD bought it.

So it’s probably fair to conclude that this is a market-wide rather than company-specific slow down. WebMD cited the delaying of full HIPAA implementation as slowing the increase in its data transactions. Maybe, but don’t forget most of those are Rx transactions which have been all electronic long before HIPAA was around, so the lower than expected growth is probably on the provider side.  The other area doing worse than expected was physician office software. Overall this suggests that physicians are not using HIPAA as an excuse to totally revamp their office software, and that–despite signs that some physicians are adopting technology in their clinical work–slow, incremental evolution is still the likely pace of change in that environment.

INDUSTRY: Healthsouth–Scrushy speaks out

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I’ve commented (perhaps too much) about the Healthsouth affair and how the vagaries of Medicare reimbursement led many different types of for-profit (and probably also non-profit) providers to go well over the top in attempting to cash in. The difference between the for-profits and the non-profits is that Wall Street demands continual growth in the numbers for the for-profits, and once the initial savings an ancillary company makes moving care out of hospitals to lower overhead facilities are assumed, growing "same-store" revenues and profits is very hard. See my earlier synopsis of that problem here.

The reason I bring this up again is that yesterday Richard Scrushy went on 60 Minutes to defend himself. Remember for a second that this wasn’t just a case like at Tenet of unnecessary upcoding (although they were billing group sessions as individual sessions so Healthsouth was doing that).  This was straight fraud–telling investors and the world that revenues and profits were one number while knowing that in reality they were lower, and changing thousands of documents so that the lies added up. Scrushy’s story is that all FIVE of his CFOs and a bunch of other senior staff lied directly to him about the numbers, and are lying now when they say Scrushy told them to alter them. Furthermore, he say that his stock sales at 3-4 times the current market price, netting him around $100 million, were mere coincidence, even though they did happen a month before the numbers finally started to tell the truth. (Actually this reminds me a little of another southern CEO’s protestations).

How will he do in court? Well, the fact that he hired a former actor from The Wonder Years who was 29 years old and had no corporate experience as his Chief Marketing honcho, and allegedly funded a series of Christian rock groups (see the third story down here!) and his wife’s habadashery company with Healthsouth money does look a touch suspicious. Meanwhile he was suing not only one poor sap on the Yahoo message board who claimed to have had an affair with his wife (he lied), but also Kim Landry, an ex-employee who suggested that Healthsouth’s stock would collapse.  Sounds like she had it about right! However, OJ Simpson is still walking the streets.

About the only thing I can think of in Scrushy’s defense is that there doesn’t seem to have been anyone prepared to go to the Feds to become a protected whistleblower.  I guess one of those CFOs wishes he’d thought of that now! Anyway, enough from me on this whole appalling issue, even if it is quite funny.  There’s a whole lot more here

Disclaimer: I had surgery at a Healthsouth ASC facility in San Francisco in March 2002, everyone treated me very well, there was no sign of the Wonder Years or any Christian rock at any time, and the drugs were great!

POLICY & PHARMA: Opposing drug re-importation is political loser for big Pharma

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All that you need to know is in today’s Harris Poll. 77% of Americans think that it’s unreasonable for pharma companies to try to make it impossible for American consumers to buy drugs from Canadian pharmacies over the Internet. Yet only 7% of Americans have done so.

If I was running a public policy group at PhRMA I’d be thinking of ways to try to beat a graceful retreat here. After all, do you think President Dean’s FDA will be quite as helpful as the current one? Better to have Canadian prices on imports rather than get this far enough up the American political consciousness that we end up with Canadian-style pricing here.

TECHNOLOGY: Tim Oren’s analysis of Sili valley development

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As  healthcare person connected to Silicon Valley by geography and osmosis, I’m always amazed why I don’t quite "get it" and hence why I’m not driving a Porsche, owning 6 houses and lying on the beach like some folks I know.  Tim Oren is a self-confessed Silicon Valley old fart Gray Beard, who really gets technology and writes the excellent Due Diligence blog. (I’ve argued with him about health care and he’s the only guy in the Bay Area who voted for Arnie but don’t let that put you off!). Tim’s recent post about how tech innovations come out of nowhere, "You never know where you’re going till you get there" is wonderful, and I just had to quote this line here:

    I served on the program committee for ACM Hypertext ’91 in San Antonio. We hold the distinction of relegating a certain prototype by a Mr. Tim Berners-Lee into the poster and demo track, since (as I recall the discussion), it didn’t present much theoretical novelty, and the user interface sucked. Well, it did.

Those of my health care readers who don’t know what this is referring to must subject themselves to the public ridiculing of asking me! But go read Tim’s article.

QUALITY QUICKIE: Another study on medical errors

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AHRQ, the Agency for Healthcare Research and Quality has put out another study on medical errors This one has a slightly different methodology than the IOM’s 1999 "To Err is Human" study. The researchers estimated that the study’s findings mean about 32,600 deaths result from various specifically defined medically-caused injuries in the U.S. each year.

The IOM’s estimates are of 44,000 to 98,000 deaths.  Some of the difference is due to the AHRQ’s methodology and choice of data set. (Here’s the abstract).  Their data set was much larger than those used by the IOM, and was based on administrative and billing data but didn’t include chart review.  The IOM study was based mostly on various other studies that included chart review.  In addition the new data focuses on "injuries" resulting from specific procedures and as far as I can tell doesn’t include adverse drug reactions, so the actual number of total deaths is likely to be much higher.

It’s also worth noticing that the attempts to find the truth in what’s really going on are hampered by the age of the data, and the type of data collected. But the direction in which all the data points is very clear. It’s dangerous in that big white building, and going into hospital can be very hazardous for your health.  Thankfully, from all anecdotal evidence I’m hearing about/seeing, providers are getting the message and are working on getting the CPOE systems, drug databases and workflow systems into the hands of clinicians.  Hopefully, this will mean that those error or "injury" rates will start coming down.

On a childish aside, if you check out AHRQ’s URL you’ll notice it used to be called the The Agency for Health Policy and Research. Think about that for a moment.  Shouldn’t research come before policy, you say?  Well they were going to name it that way until someone noticed it’s acronym would be AH-CRaP).

PHARMA: The orphan blockbuster costs $800m

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Forbes is pumping out a lot of interesting articles on the pharma market these days.  In an article called The Diagnosis For Medical Diagnostics they raise the issue of pairing diagnostics with drugs.  The basic problem is that as drug development becomes more specialized, genetic-based diagnostic testing pinpoints who the drugs will work for.  So the drugs will be more likely to work in those patients and have better results. This is a good thing! 

However, if we know who the drugs will work for, we’ll also know that the same drug won’t work so well for other patients. It’s likely therefore that newer drugs will only work for a smaller share of patients with any particular condition. For the drug to be profitable either the it must cost more per patient or less to develop.  The CEO of Genta quoted in the article doesn’t believe that the cost of drug development–the $800m in the title–is going to come down, which means that their drugs (and presumably many others) are going to cost significantly more per patient than currently available less effective drugs.  And as Jane Sarasohn Kahn mentioned in this recent post, "It’s not clear really who will be willing to pay for innovation". Given that patients are gong to want these new drugs, this leaves both the pharma cos and the rest of us with a big problem–particularly if Medicare is going to pay for drugs (uncertain, but likely) and seniors are going to vote (damn certain!).

PHARMA: Follow up to the Pipeline Post

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Health care expert and all-round wonderful person Jane Sarasohn-Kahn of Think-Health has some added thoughts about what’s likely to be happening inside the pharma industry to deal with the "pipeline problem" discussed in this recent post. Jane suggests you keep your eye on three related developments:

    1.  A lot more co-marketing agreements between pharmas (a la Bayer and GSK’s venture into Levitra, Viagra’s competitor for the moment)

    2.  Pharmas are looking to biotech for new formulations, but they’re also looking to smaller pharmas too for licensing deals.  This will be important over the next few years.  Obviously, biotech will be important in the longer term, but the juries are still out on so many very expensive drugs. We will be hitting the wall on who is going to pay for those expensive bio drugs, and I anticipate that will be a big area of contention.  It’s not clear really who will be willing to pay for innovation.

    3.  We can’t switch too many more drugs to OTC as allergy and GI were the low hanging fruit here.  We’ll get a bit more savings out of switches, but then you get into another category of drugs that really does require professional input — depression/mental health, migraine, anti-infectives (gotta watch out for resistance there and over-indulging the paeds population whose mothers aren’t patient enough when it comes to ‘watchful waiting’ over ear infections), cancer, HIV/AIDS, etc.