Blog Page 985

POLICY: Medicare morning-after round-up, with update

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So a plethera of information about the Medicare bill emerges after the long weekend.  The weekend instant pundit talk shows that I saw claimed it was a triumph for the President, with the odd real conservative crying into his egg-nog. Bush though decided that going on a lay-over at Baghdad would be more helpful to his re-election, and I think the Prez got the issue right (if not the policy–but this is a health care blog, Matthew!) Meanwhile, Milt Freudenheim in the NY Times reminded everyone that the competition aspect of the law is mostly irrelevant and elsewhere they found a ton of seniors in Florida who think they got stiffed. Over at Democrat blog DailyKos the previous ignorance of and about the bill has been replaced by a bitter screed showing that the rural care aspect of the bill takes money from big-city hospitals (serving Democrats) to rural ones (serving Republicans). While you should take a pinch of salt with that analysis, you should also consider what happens if the AAMC gets riled. Those big-city academic names have a lot of clout in American health care.

Elsewhere Forrester research (log-in as a guest allowed) believes that the bill will have  immediate consequence in three other areas

  1. More drug discounting via new discount cards. Why? Medicare PBMs wanting to get going in 2006 will give deep discounts now to learn seniors’ online behavior, demographics, and drug history. Allow me some doubt on this one, as the PBMs have shown only moderate interest in cash pay cards so far and seniors have little interest in letting them know about those issues! And even if they knew, where in the bill does it say "restrictive formulary" or "co-marketing arrangement".
  2. Redefine the market for hospital services as Medicare requires more quality data. Forrester says this will change hospital behavior and help healthcare IT firms. Maybe. But quality measures have been around and been meaningless before and its the IOM rather than politically maleable CMS that tends to drive this, albeit slowly
  3. Not slow the development of specialty hospitals despite the 18 month moratorium. Agreed.
  4. See a boom in health savings account (HSAs) and CDH. I’m still very unconvinced that employers are biting at this. And remember that MSAs (same as HSAs) cannot logically contain enough health care spending to be effective in restraining health care costs, whatever optimistic conservative theorists believe.  It’s called "insurance" for a reason even if you are a self-insured employer.

Still, while I often find Forrester over-optimistic on the pace of change, they are doing the right thing, which is looking for wrinkles in the Bill that will start changing behavior of market players. So keep looking into the folds of the bill’s flesh both politically and business-wise.

UPDATE: Harvard Professor Bob Blendon (health care’s leading political analyst) gives his take on NPR.  Overall, young people like what they’ve heard; seniors hate it, but it won’t matter politically until 2005.

POLICY: Medicare round-up around the blogsphere

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My take on the Bill remains the same. The details will see it losing support among seniors, but probably not enough to matter politically. Paul Ginsburg sees it differently and thinks that there might be another 1989 style repeal on the way. Some first comments on senior support that I’ve heard in the media seem to match this article which has feelings among seniors very mixed. Don’t forget that the most politically influential seniors already have drug coverage–they’ll only get really mad if they see their employers dropping coverage and forcing them into the Medicare plan (which is after all voluntary). That’s why there’s so much money in the plan to bribe what Don Johnson is calling "Old America" (employers who offer pensions) into keeping their pharmaceutical benefits alive for now. The rest of the NYT article that quotes Ginsburg suggests that employers will tread gently in moving retirees over to the Medicare drug program, and of course they can’t before January 2006.  Some of you following at home might notice that there’s an election some 13 months before that. Curious, eh, that the program doesn’t start immediately after the election or even just before it? The original Medicare program went into operation in less than 9 months! (You’ll notice that I’m in flippant holiday mode today!)

Frankly I don’t think anyone else in America cares too much about this bill.  Hence this huge change in the second biggest government social program has relatively little impact on the news, and even less around the non-health care blogsphere. (One article in the last three days on Andrewsullivan.com and that one shorter than his post on England’s win in the Rugby World Cup . Not one that I can find on the DailyKos. These are, I believe, the two most visited "right" and "left" blogs in the US).

Talking of Don, he has an interesting piece at The Business Word about how the bill is a response to demands from the "market".  His assessment is bang on, although he shares Karl Marx’s rather than Adam Smith’s definition of a "market" (Betcha no one’s called you a commie before, eh Don?!).  Don also links to non-HC blogger Daniel M Drazner (who claims to be a libertarian Republican–and you thought there were none left!), who has a post with multo-comments from his mainly right wing crowd on the issue.

Elsewhere DB’s Medrants has both a cut down but useful explanation of the details and his own comments which are largely centrist in the "we were never going to get the perfect bill, but this is a workable start" vein. He promises to add more over the weekend (and all you’ll be doing is eating left-over turkey sandwiches!).

Russ at the Bloviator doesn’t hide his true feelings.  He believes that this Bill is  a) responsible for the death of Medicare as we know it and b) that this is a very bad thing. I would slightly agree with him on the death issue other than it is only at the very start of a long slope towards the TDOMAWKI (pron. Tee-Dom-Or-Key), and that the Medicare program will inevitably get some huge dose of reform anyway some time between now and 20010-2 as the baby-boomers move towards it.

Otherwise that seems to be about it for the Medicare postings. I’ll inevitably get stuck into some of the nuances of the business and political implications next week.

Have a great Thanksgiving holiday.

POLICY: Medicare bill passes

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So it’s done. The Medicare bill passed the Senate this morning 54-44 with the votes of enough conservative Democrats to ensure an easy passage. My suspicion is that there’s a lot less here than meets the eye. However, Tom Daschle (who’s continued tenure as Minority leader in the Senate is already in doubt) was the first to notice that 

    "This is not the final vote. This is the beginning of the end; it is not the end. We will see many many more votes. I predict that we will be back within the next 12 months. Seniors will demand that we respond to the many deficiencies of this bill, and they will not rest until we address them.”

I don’t think it’s necessarily 12 months, but there’ll certainly be many more attempts to amend Medicare in the next 1-6 years. We won’t see the program left alone as we have for the last 6 years. However as several of the cooler heads in the health care blogsphere have been commenting, the drug benefit is relatively limited, the competition and premium support aspects are minor tinkering (for the moment!), and the boost to the program in terms of budget will eventually need cuts elsewhere or new funding sources. The important questions are:

    1. While this is an immediate win for the Republicans, as the news filters out about what’s actually in the program, who wins politically out of this in the next 12 months? My suspicion is that this bill is net bad for enough seniors that the Democrats do. Of course given Iraq et al it may not matter.
    2. How much does the pharma and PBM industry benefit? Again this depends on the details of the implementation. Particularly how over time who aggressive will the government force the PBMs to be with the pharmas on price? Volume will clearly go up.  Will prices come down to match or not much?
    3. Will employers maintain their drug benefits for their retirees? That’s the question that both matters most politically and also determines to some extent how popular and therefore how expensive the drug benefit will be.

    TECHNOLOGY: eHealth update

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    I posted a while back on Manhattan Research’s new Cybercitizen health findings. In the past week I’ve received Forrester Research’s Healthcare First Look email and also seen a new article from Caroline Broder at iHealthBeat on Manhattan research’s eHealth findings. Forrester focuses on Rx sites and on physician sites.  The results are predictable.  There is good information on Rx sites, but consumers don’t trust drug companies as a source.  They’d rather see it from their own doctor or from a medical specialty society.  But the doctors don’t have a web site or if they do, only 6% of consumers have been to see it.

    Manhattan concentrates on consumer use of the eHealth space generally and their intersections with health plan sites in particular.  And like in Forrester’s previous research on the topic, health plan sites are little used and not very functional. Around 20% use their health plan’s site, and are in general dissapointed with what they can do there.  Manhattan though believes that health plan sites are getting better and starting to incorporate more useful functionality. As regular readers know, I was trying to sell software to health plans to help them do this from 2000-2002 and we were well ahead of the market.  Nice to hear that they’re slowly moving in the right direction.

    QUALITY QUICKIE: Ratings getting off ground, but humbled by technology

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    While it’s really baby steps, it looks like the slowly emerging consumer-directed health plan movement is finding some information out there to show its members.  Even stock site CBS Marketwatch has noticed in this article called hospital, doctor quality ratings getting off ground. But while Healthgrades and Leapfrog rate hospitals, the Californians who are a little ahead of the game here and actually paying for "quality" are increasing the amount of incentive they are giving medical groups for having EMRs or other technology that improves and measures healthcare delivery and quality. The Pay for Performance initiative from IHA is now going to weight 20% of its bonus based on the level of investment the provider group makes in IT.

    That of course begs the cynical question; if the IT is not up to scratch to capture the information about the care being delivered, how do they (or Healthgrades or Leapfrog for that matter) know what care they are really rewarding with the program?  OK, so that’s a little cynical of me, but the demand from the IOM for a national information reporting system is essentially pointing out the same thing.

    The quality buffs always say that you can’t manage what you can’t measure and it appears that we can’t really measure what we’re doing.  So the measurement that is going on is indeed improving in only baby steps.

    POLICY: Medicare drug bill on its way to passage.

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    Well, the bill is going to make it.  The dissidents in the Senate led by Kennedy could only muster 29 votes in favor of a filibuster (they need 40).  So the bill will pass tonight. Drug stocks and PBM stocks rallied yet further on the news–here’s Caremark’s performance–note the bump in price and volume around 2pm EST.

    So I was wrong about this one.  I thought that it would get past the House easily and die in the Senate.  But in fact it was (almost) the other way around.

    This is immediate very good news for a smallish subset of poor sick seniors, rural hospitals, pharma companies and (probably) PBMs.  It’s good-ish news for doctors who got a 1.5% hike as opposed to a 4% cut in Medicare payments for their support, and employers who will now start to get subsidized for something they were doing anyway. It’s not such  good news for Medicare recipients who already have drug coverage and now will probably be pushed by employers into the Medicare system. And, as for the taxpayer, as the conservative Republicans who voted against it claimed, we’re witnessing the birth of another, potentially out-of-control, Federal spending program.

    The longer term implications for Medicare depend on the details of the bills that will amend this bill in years to come–and there will be several.  The shorter term implications are about how this will play out for seniors in next year’s elections. Is it "Drug coverage" or "The end of Medicare"?

    INDUSTRY: Tenet watch

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    Sometimes the old favorites don’t disappoint! Tenet is in the news again with some more subpoenas about possible fraudulent referrals, this time in Louisiana, and a spat with Blue Cross in California which said that half its cardiac procedures at Doctors Medical Center of Modesto were unnecessary. In fact things got so nasty last week that the CEO of the hospital was going to sue Blue Cross for defamation! It looks like Blue Cross is keeping the hospital in its network for now.  Tenet however believes that the root of this dispute was a fight over $50m in reimbursements, and of course we don’t yet know how that got settled.

    Meanwhile, remember the little company that Tenet was using for reporting (having fired Perot systems)? Well apparently that company took over another that held a big repository of (patient-identified) medical errors.  During the first monthly conference call a rustling was heard on the other side of the phone and then no one answered.  Apparently the repo man had come a knockin’. It seems that the lease hadn’t been paid and that they were kicked out of the office–immediately. I’m sure none of the hospitals using that service would be worried about the security of their error data, would they?

    POLICY: Medicare bill making it?

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    As I go to bed late, late Sunday night it looks like the Medicare bill is going to avoid a filibuster and get through the Senate.  Go see Don Johnson at The Business Word for the latest news. Meanwhile here’s a chart showing how much impact the bill will have on seniors’ drug costs.  As I remark in some comments over at the Bloviator, it really only helps those poor seniors who are currently paying $2-4,000 a year and are literally deciding between food or drugs–and those with drug costs over $5,000 for whom it is a good catastrophic drug insurance policy.  For the larger majority  of seniors paying less for drugs or those with higher incomes, this bill doesn’t do too much.  It also looks like it’ll reduce employers’ support for Medigap policies. I suspect that the politically unpopularity of that feature of the Bill will come to bite the Republicans in the 2004 election. In any event watch for more vicious politicization of Medicare’s future in its representation to seniors in the coming days and weeks.

    PHARMA: Statin drugs may go OTC in UK next year and Crestor update

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    As you probably know by now, the UK has a national health service (NHS) which pays for prescription drugs. Most Brits pay a small (or if they are over 60 no) co-payment when they get their drugs and the real cost of the drugs are absorbed by the government. The government does indeed bargain down the price of the drugs, but there is still a real cost involved. Just like health plans in the  US, where Wellpoint led the battle to get Claritin forcibly moved to the OTC market, the UK is interested in moving drugs OTC–where of course the cost is absorbed directly by the consumer. 

    Now, one of the most significant categories is moving in that direction. Currently the NHS is spending roughly $625 per year for each of the 1.5 million Brits on statins–more proof as if you needed it that we Brits eat too much greasy food!  At over $900m a year, that’s a tempting morsel to get off the government’s budget, and consequently the health minister is looking to move statins to OTC in the UK within 6 months.

    Merck is thrilled about this as its main statin Zocor lost its patent in the UK earlier this year–it has patent protection in the US until 2006.  Pfizer has less to worry about in the US as Lipitor is patented until 2010. However, in the UK presumably if Lipitor comes out of the NHS’ (and in some cases out of fundholding GPs’ budgets), and Zocor is availble OTC, this is bad news for Lipitor as physicians there will stop prescribing it, and instead tell patients to get Zocor at the local chemist. Of course, Merck and its OTC competitors will meet stiff price resistance there. At Drugstore.com Liptor is about $1100 a year in the US, but less than half that in Canada, and obviously will cost much less OTC in the UK. So this might be a fore-runner of what happens in the US when Zocor goes off patent in 2 years. And of course if Zocor is operating successfully OTC in the UK by then, why wouldn’t US health plans want to move it and Lipitor OTC here too–just as they did with Claritin?

    Crestor Update.  The newest statin Crestor from Astra-Zeneca has had a somewhat rocky start.  In this post I noted that the  research group Friedman, Billings, Ramsey & Co had suggested Crestor wasn’t selling too well and that there were some adverse events being reported in the UK.  Now that same group has reported that according to:

      The Canadian Adverse Drug Reaction Monitoring Program, a database maintained by the Therapeutic Products Directorate of Health Canada (the drug regulatory agency in Canada), between February 1st and September 30th, 30 adverse drug reactions have been reported with Crestor, 24 of which were considered serious. In addition to 10 reports of muscle-related side effects (eight at the 10mg strength and two at 20mg, with eight patients below the age of 60) and one death (myocardial infarction in a 22-year-old patient), we find it notable that kidney-related adverse events have been associated with the drug at lower dosages. Events associated with kidney issues were observed in five patients in Canada and are as follows:

      ? one report of acute renal failure at the 40mg strength;
      ? one report of nephropathy at the 10mg strength;
      ? two reports of proteinuria at 10mg;
      ? three reports of hematuria, one at 10mg and two at the 20mg strength;
      ? two reports of increased blood creatinine, one at 10mg and one at the 40mg strength.

    Of course it’s still very early days for Crestor, but between these reports and the suggestions of rushing the research in The Lancet last month, it may be that the FDA starts to consider some action.

    TECHNOLOGY: eHealth update

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    I posted a while back on Manhattan Research’s new Cybercitizen health findings. In the past week I’ve received Forrester Research’s Healthcare First Look email and also seen a new article from Caroline Broder at iHealthBeat on Manhattan research’s eHealth findings. Forrester focuses on Rx sites and on physician sites.  The results are predictable.  There is good information on Rx sites, but consumers don’t trust drug companies as a source.  They’d rather see it from their own doctor or from a medical specialty society.  But the doctors don’t have a web site or if they do, only 6% of consumers have been to see it.

    Manhattan concentrates on consumer use of the eHealth space generally and their intersections with health plan sites in particular.  And like in Forrester’s previous research on the topic, health plan sites are little used and not very functional. Around 20% use their health plan’s site, and are in general dissapointed with what they can do there.  Manhattan though believes that health plan sites are getting better and starting to incorporate more useful functionality. As regular readers know, I was trying to sell software to health plans to help them do this from 2000-2002 and we were well ahead of the market.  Nice to hear that they’re slowly moving in the right direction.