Author Archives

John Irvine

Trump’s New Man at HHS

Nov 15, 2017• 3

By STEVE FINDLAY

President Trump’s nominee to be the next HHS Secretary—Alex Azar—has a sparkling resume and by most accounts is a practical, accomplished and solid choice to lead the agency and the federal government’s health programs for at least the next 3 years.

He served as HHS Deputy Secretary under George W. Bush.

But the choice is yet another by the Trump administration that puts industry leaders in charge of public policy and programs. And in this case that could matter as much as the appointment of Scott Pruitt to head the EPA—although I do not equate the two personally since Pruitt is a severe partisan with a disdain for the federal government while Azar apparently acquitted himself well while serving at HHS under Bush.

The problem is Azar spent most of the last 10 years at pharmaceutical giant Eli Lilly and was president of Lilly’s U.S. affiliate before leaving that post in January. He also served on the board of the biopharmaceutical industry trade group BIO.

A Brief History of Price Controls by Annoyed Republican Administrations

Nov 15, 2017• 17

By UWE REINHARDT

Although, unlike most other nations, the U.S. has only two parties worth the name, their professed doctrines compared with their actions strikes me as more confusing than the well-known Slutsky Decomposition which, as everyone knows, can be derived simply from a straightforward application of Kramer’s rule to a matrix of second partial derivatives of a multivariable demand function.

The leaders of the drug industry, for example, probably are now breaking out the champagne in the soothing belief that their aggressive pricing policies for even old drugs are safe for at least the next eight years from the allegedly fearsome, regulation-prone, price-controlling Democrats. My advice to them is: Cool it! Follow me through a brief history of Republican health policy, to learn what Republicans will do to the health-care sector when it ticks them off.

Republicans like to tar Democrats over allegedly socialist policy instruments such as price controls, global budgets and deficit-financed government spending. Democrats usually roll over to take that abuse, almost like hanging onto their posteriors signs that says “Kick me.” I say “abuse,” because Republicans have never shied away from using the Democrats’ allegedly left-wing tactics when health care chews up their budgets or turns voters against them.

What Would a Disrupted Health Care Field Look Like?

Nov 14, 2017• 4

By ANDY ORAM

Clayton Christensen, the famous economist who popularized ideas of innovation and disruption, showed up at the recent Connected Health conference in Boston. Although billed as a panelist, he turned up without warning as a guest in a keynote and posed the same question I asked in an article back in July: “The overarching question: whither technology?”

Like my article, Christensen distinguished between incremental improvements that don’t challenge current power structures or sources of revenue, and disruptive change that offers new solutions to old, intractable problems. Disruptive change, as summarized by Christensen, changes processes as well as products.

A similar question came up in a panel, where the moderator asked his guests whether device and app manufacturers were thinking just about the health care field as it is now, or the field as it will be in four or five years. It’s telling that his question went unanswered. I believe that most health care developers are seeking a niche in the current ecology, although hoping to be able to make the evolutionary leap when that ecology changes.

Why Hospitals Are Losing Serious Money And What That Means For Your Future

Nov 12, 2017• 12

By ROBERT PEARL, MD

A strange thing happened last year in some the nation’s most established hospitals and health systems. Hundreds of millions of dollars in income suddenly disappeared.

This article examines the economic struggles of inpatient facilities, the even harsher realities in front of them, and why hospitals are likely to aggravate, not address, healthcare’s rising cost issues.

According to the Harvard Business Review, several big-name hospitals reported significant declines and, in some cases, net losses to their FY 2016 operating margins. Among them, Partners HealthCare, New England’s largest hospital network, lost $108 million; the Cleveland Clinic witnessed a 71% decline in operating income; and MD Anderson, the nation’s largest cancer center, dropped $266 million.

How did some of the biggest brands in care delivery lose this much money? The problem isn’t declining revenue. Since 2009, hospitals have accounted for half of the $240 billion spending increase among private U.S. insurers. It’s not that increased competition is driving price wars, either. On the contrary, 1,412 hospitals have merged since 1998, primarily to increase their clout with insurers and raise prices. Nor is it a consequence of people needing less medical care. The prevalence chronic illness continues to escalate, accounting for 75% of U.S. healthcare costs, according to the CDC.

Practicing Medicine While Black

Nov 9, 2017• 10

By KIP SULLIVAN, JD

The managed care movement thrives on misleading words and phrases. Perhaps the worst example is the incessant use of the word “quality” to characterize a problem that has multiple causes, only one of which might be inferior physician or hospital quality. [1] To illustrate with a non-medical analogy, no one would blame auto repair mechanics if 50 percent of their customers failed to bring their cars in for regular oil changes. We would attribute the underuse of mechanics’ services to forces far beyond the mechanic’s control and would not, therefore, refer to the problem as a “quality” problem.

But over the last three decades it has become acceptable among American health policy experts and policy-makers to characterize any measurement of under- or over-use of medical care, or any measurement of a medical outcome, no matter how poorly adjusted to reflect factors outside provider control, as an indication of “quality.” The widespread, inappropriate use of “quality” long ago set off a vicious cycle. It helped spread the folklore that the quality of America’s doctors and hospitals is awful, and that in turn was used to justify taking even more crude measurements of quality, and so on. [2]Continue reading…

Right to Know: Why the FDA Should Not Be Cut Out of Expanded Access Requests

Nov 6, 2017• 2

By CHAPMAN, KLEIN and McFADYEN

Over the past three years, the libertarian Goldwater Institute–led right to try (RTT) movement has had wind in its sails, propelling the passage of RTT laws in 38 states and counting. The movement, which aims to cut the FDA out of the process by which patients with serious or immediately life-threatening diseases without available therapies access investigational drugs and biologics, hit some choppier waters at the hearing held October 3rd by the Health Subcommittee of the House Energy & Commerce Committee. The House is considering passage of a federal RTT bill, and two potential options were presented at the hearing. S. 204, sponsored by Sen. Ron Johnson (R-Wis.), was passed by unanimous consent in the Senate on August 3. Another RTT bill, H.R. 1020, introduced by Representatives Morgan Griffith (R-Va.) and Dave Brat (R-Va.) in February, was also under consideration. Rep. Andy Biggs (R-Arizona), who in February introduced a third version of a federal RTT bill, H.R. 878, testified at the hearing. Senators Joe Donnelly (D-Ill.) and Johnson have urged the House to pass S.204 “as soon as possible” and “without amendment.” Making any changes to S.204 would require reconsideration of the new version by the Senate.

A Tale of Two Doctors

Nov 3, 2017• 10

By ROBERT MCNUTT, MD

Data is not always the path to identifying good medicine. Quality and cost measures should not be perceived as “scores,” because the health care process is neither simplistic nor deterministic; it involves as much art and perception as science—and never is this more the case than in the first step of that process, making a diagnosis.

I share the following story to illustrate this lesson: we should stop behaving as if good quality can be delineated by data alone. Instead, we should be using that data to ask questions. We need to know more about exactly what we are measuring, how we can capture both the physician and patient inputs to care decisions, and how and why there are variations among different physicians.

A Tale of Two Doctors

“As soon as I start swimming, my chest feels heavy and I have trouble breathing. It is a dull pain. It is scary. I swim about a lap of the pool, and, thankfully, the pain goes away. This is happening every time I go to work out in the pool”.

Her primary physician listened intently. With more than 40 years of experience, the physician, a stalwart in the medical community, loved by all, who scored high on the “physician compare” web site listing, stopped the interview after the description and announced, with concern, that she needed to have a cardiac stress test. The stress test would require walking on a “treadmill” to monitor her heart and would include, additionally, an echocardiogram test to see if her heart was being compromised from a lack of blood flow.

“But, I have had three echocardiogram tests in the last year as part of my treatment for breast cancer and each was normal. Why would I need another”?

“Well, I understand your concern about more tests, but the echocardiograms were done without having your heart stressed by exercise. The echo tests may be normal under those circumstances, but be abnormal when you are on the treadmill. You still need the test, unfortunately. I want to order the test today and you should get it done in the next week”.

The Dunning-Kruger Effect, Or the Real Reason Why the Guys Trying to “Fix” Health Care Are Driving You Crazy

Nov 3, 2017• 2

By HANS DUVEFELT, MD

“The fool doth think he is wise, but the wise man knows himself to be a fool.”
– Willam Shakespeare

I learned about the Dunning-Kruger effect at a medical conference recently. It certainly seems to apply in medicine. So often, a novice thinks he or she has mastered a new skill or achieved full understanding of something complicated, but as time goes on, we all begin to see how little we actually know. Over time, we may regain some or most of our initial confidence, but never all of it. Experience brings at least a measure of humility.

Just the other day I finished a manuscript for an article in a Swedish medical journal with the statement that, 38 years after my medical school graduation, I’m starting to “get warm in my clothes”, as we say in Swedish.

I think the Dunning-Kruger effect applies not only to people who are in the beginning of a career in medicine, but also to people who learn about it for purposes of judging its quality or efficiency or of regulating or managing it from a governmental or administrative point of view.

I think many people outside medicine think “how hard can it be” and then proceed to imagine ways to change how trained medical professionals do their work.

But the Dunning-Kruger effect is also a particular problem in rural primary care. Newly trained physicians, PA’s and Nurse Practitioners are asked to work in relative professional isolation with full responsibility for sizeable patient populations. Unlike the hospital environment, primary care practices seldom have time earmarked for teaching and supervision, and there is little feedback given to such new providers. There is also very seldom collaboration and communication about specific patients or cases. We probably get more feedback from our specialist consultants than we do from the providers in our own clinics, because we are all busy with our own patients.

So, how does a new clinician avoid the newbie hubris Dunning and Kruger describe? Seek out potential mentors and ask them to be yours, start a case conference at your clinic, read the leading journals, NEJM, JAMA, BMJ, The Lancet and ones like them, and read about the history of medicine and the old masters.

Evaluating ACO Performance, 2016 Edition

Nov 2, 2017• 1

By DAVID INTROCASO

(A review of 2015 ACO results appeared on The Health Care Blog on October 1, 2016.)

The Medicare Shared Savings Program (MSSP), or Accountable Care Organizations (ACOs), continue to be CMS’ flagship pay for performance (P4P) model delivering care via 432 MSSP ACOs located in every state to over nine million, or 16%, of Medicare beneficiaries. This year the agency did not announce 2016 performance year results. Instead, CMS posted without notice in late October a Public Use File (PUF) or spread sheet summarizing 2016 performance. What analysis CMS did provide was by CMS’ vendor, the Research Triangle Institute (RTI), several weeks ago to ACO participants via webinar. RTI’s slides are not made publicly available.

Like performance year one (2013), two (2014), and three (2015), performance year four (2016) once again produced limited positive results. As stated last year, CMS does not evaluate the ACO program, therefore, ACO participants and Medicare policy analysts are left to decipher how success was achieved, what performance results mean for the MSSP program and in context of the agency’s overall efforts to reduce Medicare spending growth.

2016 ACO Financial Performance Results

Here is a bulleted summary of 2016 financial performance based on the PUF and RTI’s slides.

In 2016 there were 432 ACOs that had their performance year results reconciled.
Of these, 410 were Track 1, six were Track 2 and 16 were Track 3.
Of the 432, 134 earned shared savings or 119 out of 410 Track 1s, six out of six Track 2s earned shared savings and nine out of 16 Track 3s earned shared savings. Four Track 3 ACOs owed $9.33 million in shared losses. Only 129 actually received shared savings checks because five of the 134 owed CMS for advanced ACO payments.
Physician only ACOs once again were more successful than ACOs that included a hospital, or 41% versus 23% respectively.
Also again longer tenured ACOs were more successful. Among the 2012-2013 ACO class 42% were successful compared to 18% of the 2016 starters.
The 134 2016 ACOs earned in sum slightly more than $700 million in shared savings. Actual savings paid out was close to $650 million because imperfect quality caused ACOs to leave money on the table and because of Medicare reimbursement or sequestration cuts required the 2011 Budget Control Act.
For 2016 30% of participation MSSP ACOs will receive a shared savings check compared to 29% in 2016, 26% in 2015 and 27% in 2014.
Earned shared savings were again highly concentrated. The 15 highest performing ACOs received $265 million total in shared savings as compared to the 15 lowest performing shared savings ACOs that received $20 million in total. An August DHHS Office of Inspector General (OIG) report made note of this dynamic, i.e., about half of the spending reductions during the first three years of the program, or $1.7 billion, were generated by 36 ACOs and three ACOs in that group generated a quarter of the amount.
Of the remaining 294 2016 ACOs, 107 fell within their positive Minimum Loss Ratio (MLR) corridor, 105 fell within their negative MLR corridor and 82 fell outside their negative MLR corridor. This last group, the worst performing ACOs, was 19% of all 2016 ACOs, significantly less than the 24% of the worse performing 2015 ACOs.
Again, success was largely determined by an ACO’s financial benchmark. ACOs that earned shared savings in 2016 had a reconciled benchmark 10% higher than all other ACOs, or respectively $11,614 per beneficiary versus $10,563 per beneficiary, or a benchmark 7% higher than those within their positive MLR corridor and 12% higher than those that fell below their negative MLR. The OIG report reached the same conclusion. During the first three years of the program, ACOs that received shared savings had a $11,748 per beneficiary benchmark compared to a $10,284 per beneficiary for ACOs that did not receive shared savings, a 12% difference. As noted last year, because of this successful ACOs only had to comparatively spend a trivial amount less than their financial benchmark to be successful.

Reducing Opioid Abuse, A Quick Guide to Internet Resources

Nov 1, 2017• 9

By DAVID HARLOW, MD

The opioid crisis has been upon us for years now, and we are now seeing the problem become more pervasive, with more than 90 deaths per day in the U.S. due to this scourge. The president recently said he would be declaring a public health emergency (which would free up some funds) but has not done so as of this writing. The public health threat is so persistent that it calls for responses on many levels, and those responses are coming. Some have been in place for a while, some are more recent. These responses may be broken down into a number of different categories:

Broader availability of naloxone (antidote) and related training to first responders, health care providers and the general public (though of course in our litigious society, applicability of Good Samaritan laws to naloxone use by laypersons is a consideration)
Medication-assisted treatment following acute episodes (emergency room visits)
States imposing limits on prescribing and dispensing, mandating education and other innovations (for example, Massachusetts’ first-in-the nation opioids law (including the first state law limiting most opioid prescriptions to a seven-day supply), enacted in 2015, with a follow-up law enacted in 2016 that among other things offers a system for recording and communicating a voluntary opiate “opt-out” for individuals); and limiting pharma payments to physicians in order to discourage incentives for high-prescriber status (current proposal in New Jersey)
Licensure and certification bodies imposing limits on prescribing and dispensing (state boards of registration in medicine, e.g., Ohio) and articulating management and operations frameworks for implementing those limits (Joint Commission)
PBMs establishing limits for dispensing (Express Scripts, CVS Caremark)
Payors imposing limits on payment (see, e.g., Cigna‘s opioid abuse detection and prevention program)
The FDA mandating prescriber training (it is also being urged to ban high-dose formulations)
Providers developing programs to limit the use of opioids in pain management along with specific targets on reduction in use (e.g., Intermountain)
Professional and industry associations providing training of clinicians in pain management without opioids, or with limited opioid use (e.g., Massachusetts Medical Society, Colorado Hospital Association)

The overarching goal is to eliminate the use of opiates for all but the most critical short-term needs (limiting prescriptions to a seven-day supply) and medically-appropriate chronic and palliative pain management. There are alternative pain relief drugs — and a wide variety of other treatments for pain, ranging from TENS to meditation to VR. Taken together, the initiatives highlighted and linked to above represent a good start. Of course, we need more than a good start, as the US consumes a wildly disproportionate share of opiates compared to other countries — follow link for some facts and figures — for predictable reasons of economics, politics and culture, and we are paying a staggering price in excess morbidity and mortality and in secondary effects (the effects on family and community).