Yesterday’s reports that a deal has been reached in the Medicare Drug negotiations do not necessarily mean that we’re actually going to get a finished bill. There are only 2 Democrats on the negotiating team, and several Senators, led by the old liberal war-horse Ted Kennedy, have previously threatened a filibuster if either a) the bill imposes a means-test on recipients or b) Medicare is forced to compete directly for members with private plans. This philosophical opposition to heading down what Kennedy and others believe is a slippery slope towards Medicare becoming a two-tiered welfare benefit rather than a global entitlement, dovetails nicely with the desire of Democrats to prevent Republicans from being able to campaign as the "party that brought you drug coverage" in 2004.
Yikes–too much to report today! Two confirmations today about employer health insurance confirm much of what I’ve posted about before. First, the Commonwealth Fund reports that a growing share of uninsured workers are employed by large firms. More noticeably, low-income workers (those under 200% of poverty) at big companies are much, much more likely to be uninsured than higher income workers in big companies–46% of those in all. Yup, this means those folks who work at McDonalds, cleaning companies, supermarket chains, home health aides, etc, etc, and the people who are the targets of California SB2.
Meanwhile, Harris Interactive’s latest poll for the WSJ Online (not online yet but you can get on the email list here) confirms the deep emotional connection between employees and health benefits. 56% of employees say that they would rather have no pay increase but a maintenance of current health benefits as opposed to a decent pay increase but a significant reduction in their health benefits.
In other words not enough people are getting insurance at work, fewer are getting it each year (especially the working poor), but employees are loathe to lose that coverage.
And in news from San Francisco, UCSF the biggest teaching hospital in the Bay Area was threatened with release of some of its patients’ data on to the Internet. The wrinkle is that the threat came from a transcriptionist who is a sub-contractor to a sub-contractor to a sub-contractor to a sub-contractor…… and the individual lives in Pakistan. The transcriptionist in Pakistan had been stiffed on her bill by the subcontractor she was working for to the tune of $500. That’s a huge sum–above the average annual income in Pakistan, so you can understand that the transcriptionist was pretty desperate, given that her employer had disappeared and that she had nowhere to turn other than UCSF (as she didn’t know who had hired the person she was working for). In the end no patient data was release, and the threat was rescinded apologetically.
How this works out under HIPAA’s privacy standards is anyone’s guest, but it could lead to a major revisiting of the whole concept of outsourcing transcription.
Update: There was a NPR talk-show on this in San Francisco yesterday, (audio available about halfway down this page). The journalist who wrote the original story claimed that as many as 50% of all transcriptions are being typed up abroad.
Continuing with its excellent work as a trailblazer in research into health care IT arena, the California HealthCare Foundation (CHCF) has put out an interesting summary report on the adoption of Computerized Patient Records (CPR) written by David Brailer and Emi Teresawa, both from health IT company Carescience. (Carescience is also the main vendor for the Santa Barbara County Care Data Exchange, funded by CHCF). The report is one of three the Foundation has put out to help push the use of the CPR.
They were reviewing other research in the field and their main conclusions are that:
— This is an extremely difficult subject to get your arms around
— The adoption line is beginning to point upwards
The piece is a good summary of several surveys trying to assess the adoption of the CPR. It’s a long piece and I haven’t digested it all, but way below I give you some of my main takeaways. Before that (and you non-wonks have permission to skip this bit but you should read it), let me explain why, as the authors correctly point out, this is such a difficult subject to assess.
1) Definition is a problem 1: The authors list some 15 terms for CPR-like things (EMR, EHR, CPOE, etc, etc, etc). We are now some 12 years on from the IOM’s original report on the subject and we can’t even figure out what to call the thing. Given none of the surveys have the chance to fully define in their questions what exactly a CPR is, it’s not surprising that the answers they are getting are different from each other.
2) Inpatient versus outpatient: The study finds much higher rates of adoption of CPRs in the clinic setting versus the hospital. Anyone who’s been to see a doctor versus been in a hospital knows that this feels wrong. My suspicion is that any type of clinical computer use is regarded as the same as a fully fledged CPR in the outpatient setting, but not so much in the inpatient setting. This may be because the inpatient setting doesn’t get much of the data transferred over from the outpatient, and so feels outside the flow of data between different settings that is supposed toe accompany the patient in a CPR. While the inpatient setting is where most of the current action in CPOE (Computerized Physician Order Entry) is happening, clinicians in hospitals think that CPOE is just a component of a CPR not the whole thing.
3) Many surveys are methodologically useless : The methodology behind various surveys is never discussed when the results are released. But of the many surveys they report I have been a participant in two. One is the annual survey conducted at HIMSS. Anyone at the conference including the thousands of vendors and consultants (and me) who outnumber the hospital IT folks about 2 to 1 can take this survey, even though it’s aimed at the hospital IT community. Consequently many of the people taking it at best don’t know the situation of the intended survey audience and at worst are trying to actively influence the outcome. The Harris surveys discussed are based on ones designed by a methodological and subject genius back in 1999–OK, OK it was me, but the methodology and the content were very carefully reviewed by survey specialists at Harris, and the content was reviewed by an expert advisory board. The people surveyed were genuine doctors who had been pre-proved as such by the AMA. So part of the problem with looking at all surveys is that the results of some are not as valuable as others.
4) Definitions are a problem 2: Even if you know what you are doing methodologically, what you are counting especially in the outpatient environment is a problem. In my initial Harris survey I did not directly ask if physicians were using an CPR but asked how they were performing a whole lot of tasks such as taking notes, prescribing drugs, etc, etc, that could have been done in several ways including using a computer, PDA, digital dictation, pen & paper, etc, etc. However, after I left the way the question was changed in recent Harris surveys, and it now asked if the doctor used an EMR. I suspect the reason for that was a) it didn’t provide a one number indicator and b) there’s only so much room on a survey, and it’s expensive to survey doctors and you have other things that you want to ask. So the trade-off of not knowing exactly what an EMR means to the doctors is worth it because of the other information you get.
Well done you’ve got here! The authors estimate that 20% to 25% of doctors are using a CPR, while something between 3% and 21% are of hospitals are using CPOE (no good numbers for CPR). More controversially, they estimate that CPR adoption will increase rapidly in the outpatient setting to between 50%-60% in the next couple of years. This growth is by no means impossible. That number is where the UK already is and well below most of Scandinavia, New Zealand and other countries such as Belgium. So what are the barriers?
A) The CPR costs too much. That can mean up to $29,000 to install and $12,000 a year to maintain. And there is no real obvious funding stream. That was not the case in those other countries where the government has funded the initiatives.
B) Standards: Despite HIPAA, HL7 et al, several standards are not being adopted that could help easy interoperability (i.e. the easy transfer of data between facilities). So even if many hospitals adopt the elements of the CPR, we are not likely to get the full transfer of data that the CPR is supposed to provide.
Medpundit has responded to my queries about her stance on MSAs, coverage and all that. Go read her piece here, then come back. Medpundit’s very concerned that many of the patients she’s seeing are coming in for expensive diagnostic tests that are supposed to prevent illness way down the road and often end up on very expensive drugs. And as Medpundit also points out, there is no cost-benefit rationale to many of these tests and immunizations. These are all covered by insurance under managed care’s "preventative" ethos, yet in the end these people will get sick and need costly care for something else anyway. New treatments do tend to keep people alive longer, but they are still going to die eventually and cost more money down the line. This is indeed the conundrum, as represented by the rather amusing "debate" a few years back started when Philip Morris "demonstrated" that smoking saved the Czech Republic money as it killed off people who would otherwise be collecting pensions and using health care benefits.
Medpundit’s solution is to make people pay for preventative (and I assume routine) care, and carry catastrophic insurance. Although I have some sympathy with this approach in avoiding what economists call moral hazard (i.e. unnecessary use of services because they are free) Canadian economists Bob Evans and Morris Barer have proved to my satisfaction that point of service user fees only really discourage the very poor from seeking care, and are as such discriminatory. But the real point is that although the testing of the healthy that Medpundit sees too much of may be increasing costs, the real money is spent on the care of those who are very sick. So if everyone bought a "catastrophic" only insurance policy, eventually the cost of those policies would increase to more or less the cost of a regular policy–because, whether it’s done via insurance or taxation, the 80 % of people who are healthy need to pay for the care of the 20% who are sick. Controlling the cost of care of the sick means doing what most Americans view as something very unpalatable–limiting care. I personally believe that limiting excessive care of those who are going to die soon anyway is totally humane. However any doctor who remembers the horrendous state persecution of Dr. Robert Weitzel in Utah is going to be highly suspicious of taking such an approach. Of course we are getting nowhere near having the kind of debate about this "rationing" that we need to have. So the status quo of more and more services being available to patients at greater and greater cost to all us will remain.
Finally Medpundit sums up both of our feelings about getting away from employment-based insurance coverage:
Unfortunately, it’s also a politically unpalatable one. No one wants to give up something they’re already getting for free. (Or think they’re getting for free).
While I was (very worthily) working out at the gym last night I noticed that November’s Smart Money had an article on Lipitor. Given that Lipitor is the single biggest product in health care, currently at $8 billion in revenue, it caught my eye. So I stuck in the reading tray on the elyptical trainer and read away as I elypted. The article (not available on-line) basically said that in a number of cases Lipitor has caused extreme muscle pain and (more devastatingly) alzheimers’ type memory loss in several patients. The article suggested that high doses (above 20mg of Lipitor) actually have the equivalent of 40mg of Zocor, one of its major rivals, yet Zocor can also be obtained in much lower doses (5mg and 10mg) which have virtually the same effect in lowering cholesterol. Why doesn’t Pfiizer make Lipitor in lower doses? Bob Erlich, now an industry consultant running DTCPerspectives Magazine but the guy responsible for Lipitor’s launch at Parke-Davis is quoted as saying essentially (I’m paraphrasing here) that one dose made it easier for the physicians to prescribe as they didn’t have to bother matching patient and dosage.
The article goes on to suggest that independent (i.e. non-pharma funded researchers) have established the high dose to muscle pain link and that the memory loss issue is well known. Behind this is a strong hint that Pfizer is too big to fight either in the dissemination of the message to doctors, or in the law courts–apparently no lawyer will sue until the FDA has withdrawn the drug from the market. Pfizer for its part acknowledges that the muscle pain is a recognized side effect, but claims that the memory loss–which the article focuses on as it’s pretty devastating–has nothing to do with Lipitor. However, everyone remembers that another statin Baycol was on the market until it was found that in a few cases it caused severe liver damage and was recalled.
It doesn’t take long googling to find several dissatisfied Lipitor users with intense muscle pain and others with transient or long-term memory loss. Unfortunately the Smart Money article doesn’t give any denominators, so there’s no real evidence other than these anecdotal stories about whether significant numbers of people have had these reactions to Lipitor. So despite the heart-rending stories, you can’t draw any conclusions. Also don’t forget that in the grander scheme of things (if you believe the conventional wisdom that lower cholesterol reduces heart disease), Lipitor is saving thousands of lives for each one it hurts–if it does hurt. This argument is played out in this article on theheart.org (long registration process required.)
From a business perspective what’s important here is the perception of risk. If statins work for millions and millions of people but a few people allegedly suffer from its side-effects, that’s really the same story that existed for Baycol. The FDA has been criticized for allowing too many drugs on the market that have to be withdrawn. Almost always the reason for the withdrawal is a nasty side-effect (e.g. death!) for a very small minority of patients. For Pfizer and its $8 billion drug, there is a very low but existing risk that this could be the end result for Lipitor. Pfizer’s stock has been off slightly in recent months on fears that some patent lawsuits might hurt Lipitor and Zoloft. Of course that’s nothing to what would happen if Lipitor had to be withdrawn, so watch this wildcard.
This topic comes your way via the always interesting Medpundit. Medpundit is a doc who doesn’t want a single payer system, and reading between the lines of her views sounds like she is in the "MSA’s for all" camp. (Even if she isn’t I’ve described the problems with that approach here as well as explaining why employment-based insurance is here to stay for a while). The poll results alluded to here are from an ABC News poll conducted October 9-13.
The most remarkable result is that when asked if they’d favor a "Medicare for all" system 62% said yes, versus only 32% saying no. There is quite a wrinkle in this because, as the article goes on to say:
This poll asks people what they’d prefer a "universal health insurance program, in which everyone is covered under a program like Medicare that’s run by the government and financed by taxpayers," or "the current system, in which most people get their health insurance from private employers, but some people have no insurance."
Previous polls have asked this differently; one last year asked if people would support or oppose "a national health plan, financed by taxpayers, in which all Americans would get their insurance from a single government plan," and found 40 percent support. The wording in this ABCNEWS/Washington Post poll weighs the proposal against the current system, and adds the Medicare model to the description.
Opposing the present system makes sense for virtually everyone. I suspect that if you asked them in a poll 30% of Americans would rather be poked in the eye with a sharp stick than have the current "system". What’s fascinating to me is that 40% of the population wants single payer, and if you call it "Medicare for all" that number goes up.
Now, there is widespread fear of uninsurance. This article shows that "Fifty-nine percent of insured (Note: my emphasis) Americans are worried about being able to continue to afford health insurance in the future" Consequently those that have health benefits via employment are very keen to keep them. Furthermore Democrats still remember from 1993-4 how vigorously the stakeholders in the system will fight to keep the statue quo. However, I’m a little surprised that of the Democrats running for President only rank outsiders Dennis Kucinich and Carole Mosely Braun are pushing the single payer, (or "Medicare Part E for Everbody") option.
So while single payer is "politically unavailable"* to Americans, the public is waking up to the increasing level of real discontent with the current system. Given Bush’s problems abroad and with the economy, do not be surprised if this issue becomes bigger and bigger for the Democrats as we head to November 2004.
*The phrase is from Ian Morrison.
From THCB’s legal office, Matt Quinn is back on the track of health care fraud once again. This time he’s turned his attention from Medi-Cal to big pharma:
The new edition of "Fortune" (the one with, as I remember, Andy Fastow in handcuffs on the cover) also has a great article about the efforts of the Michael Sullivan and his US Attorney’s office in Boston to crack down on fraud by the pharmaceutical industry (only first part avail free). In a speech at this year’s Pharmaceutical Marketing Congress in Philly that, I’m sure, went over like a fart in church, Michael Loucks (who runs the health care Fraud unit in Sullivan’s office) lectured the assembled industry leaders:
"Since 2000…drugmakers (have) coughed up more than $2.2 billion to settle such civil and criminal violations as kickbacks to doctors, overcharging, and marketing drugs for unapproved uses…No other sector of the health-care industry," he said, "has ever paid similar amounts in health-care fraud investigations in so short a time."
While some suspect that Sullivan has higher political ambitions and is simply attacking big pharma because it’s an easy target with deep pockets, the US Attorney’s office states that its main concern is "that drug companies are corrupting medical judgment by paying off doctors, then passing on those costs to consumers." Strict oversight, he argues is "pro business." That whistleblowers get a cut of the judgment doesn’t hurt either.
According to the article, in 2002 the average American incurred $5,037 in medical costs. By 2010 that number is expected to jump 60% to $8,368. As much as 10% of that pricetag, the article postulates, is fraud.
With a trend (see this article in AIShealth’s Government News) of reinvesting money from Medicare and Medicaid fraud back into healthcare, wouldn’t a great use for this money be to invest in 1) beefed up investigation and oversight efforts and 2) a task force to simplify and streamline Medicare’s rules? While this would ultimately (hopefully!) be a self diminishing revenue stream, it would serve the good of the taxpayer by driving efficiency in the healthcare system as a whole while focusing enforcement efforts on those who intend to defraud vs. those who are simply confused with the rules. And best of all it would be totally self funding (with, perhaps, a little left over for investment back into the provision of care).
Today’s New York Times reports with data what most of us following along at home have suspected for a while–seniors don’t like what they are hearing about the Medicare drug bill, and the blame is shifting towards the President.
A poll conducted this month by The New York Times and CBS News showed that Mr. Bush had a 41 percent approval rating among the 65-and-older voters, his lowest among any age group. That was down from 44 percent in July and 63 percent in May.
The main issue is that middle income retirees are finding out not only that they’ll have to pay premiums for drug coverage, but also that there’s a hole in the middle of the benefit package–it runs out somewhere after the first $4,000 of spending. There may also be some nasty compromises required for upper income seniors, in particular means testing for those earning more than $60,000 a year. Furthermore, without any bill there’s a big increase in the amount Medicare recipients will have to pay in Part B premiums next year, up $7.90 to $66.60 per month.
Liberal Democrats in the Senate, led by Edward Kennedy, have vowed not to accept means testing, as they believe it will be the start of a slippery slope to a two-tiered system. And in poll after poll seniors have consistently trusted the Democrats over the Republicans in their assessment of which party is better for Medicare. It may be hard for the average taxpayer to feel much sympathy for the small percentage of seniors who earn almost double the average American household being asked to contribute more towards their Medicare coverage. However, it was those seniors who caused the repeal of Medicare Catastrophic Act back in 1989. And all politicians know that the average senior not only votes at much higher rates than younger voters but also that seniors are concentrated in states like Pennsylvania and Florida. You may remember that one of those states in particular was quite important in the outcome of the last Presidential election, and you can be very sure that, bill or no bill this year, this issue will be at the forefront of the Democratic campaign in those states.
If you think back to late 1998 you may remember that stodgy drug distributor McKesson bought hospital software company HBOC. HBOC had grown into being the biggest HIT software supplier, mostly through a series of acquisitions through the 1990s. At that point most observers believed that McKesson was mistakenly buying a company that had run out of growth potential and was selling out at the top. If you remember 1999 (and if you owned McKesson stock you probably do!), it became apparent to McKesson that the news was much worse. They discovered that HBOC’s profits were fictional and found that Charles McCall, its new CEO acquired with HBOC, was behind the fraud. In one day McKesson lost half its value.
Fast forward to last Friday, a mere 4 years and 6 odd months later, and one of the guilty parties, former Exec VP Albert Bergonzi admitted it. Meanwhile the biggest fish, McCall, was indicted only in June 2003. Evidence given by some of the others, notably ex-CFO Jay Gilbertson, shows that the fraud was started in early 1997 basically to dress the company up for sale.
So apart from the awful luck McKesson had by failing to do its due diligence properly, and the consequent suffering of the shareholders (Mckesson’s stock is still where it was immediately after the fraud was announced), the real question is why does it take the better part of 5 years for this fraud to be prosecuted? And does that delay help to encourage other white collar criminals to cheat the books and the rest of us?