My correspondents have sent me lots of articles today. All worth a read—

When Is a Pain Doctor a Drug Pusher? Basically never as far as I can tell but in the DEA’s view any time the DEA feels that its livelihood is threatened. What a disgusting scumbag organization (and I include the US and State DA’s in their ecosystem), and I’m beyond disgusted that as a taxpayer I’m paying for this insanity. The DEA needs to abolished and anyone who’s

Report Rates Hospitals on Their Heart Treatment. The “report” is from CMS using Medicare data and it names names. I spent the last two days with lots of hospitals. They don’t think this type of hospital ranking matters yet, and they’re right. But it will matter increasingly as patients figure this out (more from me on this next week).


3 drug makers busted and fined for drug reimbursement scam in cancer drugs. Not exactly a surprise:

The plaintiffs argued that the drug makers had sold medications to doctors at steep discounts to the “average wholesale price” that Medicare and pension funds paid, while secretly encouraging them to claim full reimbursement from insurers.

There is nothing rational about allowing doctors to profit from selling drugs. But then again there’s nothing rational in our payment system as a whole. This is, though, one abuse that should be ended quickly.

Finally from the WSJ, yet again showing that it’s a socialist rag, How many doctors does it treat to see a patient? (Behind sub wall I’m afraid), but let me give you the first few lines:

In the mid-1990s I worked weekend shifts as a “moonlighting” doctor in a suburban Chicago hospital. When I would show up on Friday evenings, the other doctors would always say: “Peter, remember, no roundtrips on weekends.” Translated, that meant no patients admitted over the weekend should go home before Monday afternoon at the earliest. I soon understood the genesis of the “no roundtrip” rule. At the crack of dawn on Monday mornings, before their regular office hours, the doctors would go from room to room, providing consultations and filling out billing cards.

The villain is of course fee-for-service medicine. The author wants it eliminated and he’s right. But note the interesting screw-up in the current incentives. The doctors wanted to see their patients on the Monday so they could bill FFS and make more money. But the hospital was getting a fixed DRG payment for most of those patients. It was in their interests to get them out of the hospital as soon as possible, as every moment they stayed they were making less money because they were filling a bed that could be filled with a new admission. Both of them are crazy incentives for the overall health care systems, but more than a decade later we still do not have hospitals and doctors on the same set of incentives—even irrational ones!

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  1. When Competition Does Not Benefit Consumers
    “But corruption is neither need based or greed based. It’s simply opportunity based.” —–
    Billy Tauzin, president and C.E.O. of PhRMA, the pharmaceutical industry’s most powerful lobbying group, as Mr. Tauzin stated in Boston recently.
    It has been said by others that the pharmaceutical industry should not have government regulation or interference from our government because that would drastically limit if not eliminate innovation as well as our health care choices, both from the perspective of the doctor and the patient, so the public has been told often. So, the public’s health would be limited and possibly harmed. As with other issues we face as citizens, this is another attempt by these others to apparently install fabricated fear in our minds- void of any proof or reason.
    As it has turned out, the pharmaceutical industry has appeared to do this on their own, overall.
    Over the past several years, those few meds created and FDA approved with true therapeutic advantages happened by discovery with government involvement in over half of these meds with clear clinical advantages for certain patients. Conversely, of the new chemical entities approved lately and developed by drug companies, over 50 percent of these have microscopic therapeutic advantage for patients, so I understand upon information and belief. This inefficient drug development by the pharmaceutical industry has created what is now the dominant development strategy of drug companies, and this strategy is known as me too drugs.
    These drugs essentially make small molecular variations of the original molecule in a particular class of medications. In other words, they tweak the original in order to obtain patent rights. This me too objective of drug companies now accounts, I believe, for about 80 percent of the research budgets of drug companies. And because the FDA only requires a potential med to be superior to a placebo in mandatory clinical trials, usually these me too meds are approved- regardless of their necessity for others.
    And me too drugs are selected by the drug company for their potential blockbuster status as well as the speculated growth of a particular market, which means making over 1 billion dollars a year on such a drug, at least. For example, statin drugs, for high cholesterol patients, is a 20 billion dollar market. As a result, there are several statin meds now available for use by doctors to prescribe to their patients. Yet, arguably, me too drugs are all essentially very similar in regards to safety, efficacy, and cost, regardless of the class referred to so often saturated with me too meds. The differences overall are minor once again with most me too drugs. As aggressive marketers, the makers of these meds are suspected of doing a bit of publication planning, it is suspected, to falsely claim superiority of their newly approved me too drug over all the other drugs in a particular class. Finally, other classes of meds with several me too drugs may include SSRI anti-depressant drugs, as well as those meds for hypertension. There may be a dozen drugs in a particular class that are all essentially the same in regards to their treatment abilities for patients with such disease states.
    Now, there may be cases where a patient tolerates one drug in a class over another for unknown reasons, so in these few cases, the me too drugs occasionally are beneficial for patients, but should absolutely not be a primary objective of the drug companies to create them as often as they do. Instead, true innovation and discovery should be the focus of pharmaceutical companies.
    Further vexing is that competition in the pharmaceutical industry amazingly does not and has not been of any financial benefit for the consumer, as competition normally does create. This fact is normally demonstrated with other industries and is the apex of business operations. This pharmaceutical industry model is an exception, and the reason for this remains an unknown, as far as the etiology of being deprived of this costly environment.
    This progressive marketing paradigm of the pharmaceutical industry, such as the creation of me too meds solely for their own profit, clearly illustrates their focus on these issues over true research and science. Innovation, along with ethics, use to define this industry. Sadly, it seems this is not the case today, which ultimately and potentially deprives potential treatment methods potentially for the public health. Yet hopefully, such historical qualities of drug companies will return some time.

  2. We need to dispatch WHO teams to

  3. Like the Energizer bunny, it keeps on………
    “results are egregious….The most severe culprit being Bristol-Meyers Squibb with an 1131% markup on its drug Vepesid. Other companies mark ups range from 28% to almost 700%.”
    3 Drug Makers Are Convicted in Reimbursement Overcharges
    A federal judge ruled yesterday that AstraZeneca, Bristol-Myers Squibb and Schering-Plough must pay damages for overcharging on certain drugs paid for by Medicare, pension funds, insurers and patients.
    Judge Patti B. Saris of United States District Court in Boston found the companies liable in a nationwide class-action lawsuit over drugs administered by doctors. She dismissed claims against Johnson & Johnson while giving plaintiffs’ lawyers until Aug. 1 to provide calculations of damages for the other companies.
    The plaintiffs argued that the drug makers had sold medications to doctors at steep discounts to the “average wholesale price” that Medicare and pension funds paid, while secretly encouraging them to claim full reimbursement from insurers. The plaintiffs are seeking hundreds of millions of dollars in damages.
    In a 183-page opinion, Judge Saris wrote: “The Medicare statute itself created a perverse incentive by pegging the nationwide reimbursement for billions of drug transactions a year to a price reported by the pharmaceutical industry, thus putting the proverbial pharmaceutical fox in charge of the reimbursement chicken coop. The different pharmaceutical companies unfairly took advantage of the system by setting sky-high prices with no relation to the marketplace.”
    The judge found that AstraZeneca, which is based in London, acted “unfairly and deceptively” by causing the publication of false and inflated average wholesale prices for its prostate cancer drug Zoladex, which exceeded doctors’ acquisition costs by as much as 169 percent.
    Bristol-Myers, of New York, caused the publication of false and inflated average wholesale prices for five drugs, including Taxol, which had spreads as high as 500 percent. Warrick, a subsidiary of Schering-Plough, which is based in Kenilworth, N.J., inflated average wholesale prices for its generic drug albuterol sulfate in a range of 100 percent to 800 percent, the judge said.
    A spokeswoman for AstraZeneca, Laura King, said that her company “has competed responsibly with respect to pricing and marketing of drugs, and we have acted at all times in accordance with the law.”
    A Bristol-Myers spokeswoman, Laura Hortas, said the company believes that it “is not responsible for the average wholesale price reimbursement benchmark used by private insurers and Medicare, and that its own pricing, sales and marketing practices were fair and reasonable.”
    The company plans to appeal a damages award, Ms. Hortas said.

  4. Government doctors are now thinking of money because of the paltry payments they recieve. If the hospitals paid their docs sufficiently, there would be no need to resort to such activities.
    Again it boils down to how the hospital is performing ecenomically. If the management goes for prudent policies like effective management, outsourced medical transcription services and better infrastructure, surely there would be no dearth of funds to pay for the doctors. I speak of this as someone who has closely watched this sector for many years now.

  5. What does it take to support Medicare reimbursement for a cancer therapy? Typically the oncologist has to produce one or two papers showing that yes, taxol + carboplatin has been used in ovarian cancers. In oncology literature, there is rarely a situation in which there is only one form of therapy which has proven effective for any first-line treatment. The NCI publishes on its “state-of-the-art” website, you can find multiple different forms of therapy. So you could flip a coin and be equally well off or equally supported by the literature in choosing therapy.
    So you have a choice of drugs and you are in an environment where physicians are getting killed or they are having trouble making their mortgage payments, much less saving up for retirement (or the lastest beemer). You don’t think that the spread between the average wholesale cost and what they get reimbursed is going to enter into their decisionmaking? Or do they choose the treatment based on what is tailored to the individual biology of the cancer patient’s tumor?
    With the likes of US Oncology, fighting the cancer crab gets even worse. US Oncology, like ASCO are a chemotherapy trade group protecting the chemotherapy concession.

  6. I find the hospital ratings site to be usable but I’m not sure it’s relevant to me as an individual.
    First of all, nobody I know has much choice about what hospital they go to — and I live in a major metropolitan area with at least 10 hospitals within 20 miles! Maybe if you have no insurance you get to pick your hospital – since you won’t be paying anyway?
    Second – are you supposed to arrive at the hospital you didn’t choose with a checklist of things they should do? What about my MIL who is 89 and had pneumonia? Am I supposed to research everything she MIGHT be admitted for and have the checklist at the ready just in case?
    I just don’t see how this really makes a difference to individuals.