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Peacefully Coexisting With the Valley of Death

May 4, 2013• 2

By Les Funtleyder

Recently, there has been an uptick in newsflow around the “series A crunch”/ “the valley of death” in regards to financing. Because of who we are (a firm that connects investors with private equity investments); we at Poliwogg see a lot of the “crunched” and “valley-dwellers.” We have some good news. The good news is that we are seeing increased interest on the part of accredited investors who have not invested in private companies before and who are now more open to the idea in light of lackluster returns in other asset classes. Aggregating this group of investors allows for investments in the range that are too large for a traditional “friends and family” round but are too small for traditional institutional investors where the crunch is most pronounced. The caveat is that companies need to be ready to meet the demands of this new crop of investors. Probably, what will be required will be more stringent than what companies have been asked for in the past. On the plus side in exchange for more requirements, these investors are often more patient and more passionate (especially in the disease categories) than traditional investors.

A few observations about what we are seeing (we view mostly healthcare companies):

• Asset prices seem fairer than they have been in a while especially when compared to the prices of similar assets in the public market; spurring investor interest.

• There do seem to be a large number of companies that raised seed rounds (sometimes in substantial sizes) from friends and family. That said given the lack of arms-length transactions the supporting documentation ( e.g. possessing an accountant and law firm, audited financials) often seems a bit lacking in our view and can make a more institutional looking round challenging if not impossible. More disclosure is always better.

Transforming Diagnosis

May 3, 2013• 2

By Thomas Insel, MD

In a few weeks, the American Psychiatric Association will release its new edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5). This volume will tweak several current diagnostic categories, from autism spectrum disorders to mood disorders. While many of these changes have been contentious, the final product involves mostly modest alterations of the previous edition, based on new insights emerging from research since 1990 when DSM-IV was published. Sometimes this research recommended new categories (e.g., mood dysregulation disorder) or that previous categories could be dropped (e.g., Asperger’s syndrome).¹

The goal of this new manual, as with all previous editions, is to provide a common language for describing psychopathology. While DSM has been described as a “Bible” for the field, it is, at best, a dictionary, creating a set of labels and defining each. The strength of each of the editions of DSM has been “reliability” – each edition has ensured that clinicians use the same terms in the same ways. The weakness is its lack of validity. Unlike our definitions of ischemic heart disease, lymphoma, or AIDS, the DSM diagnoses are based on a consensus about clusters of clinical symptoms, not any objective laboratory measure. In the rest of medicine, this would be equivalent to creating diagnostic systems based on the nature of chest pain or the quality of fever. Indeed, symptom-based diagnosis, once common in other areas of medicine, has been largely replaced in the past half century as we have understood that symptoms alone rarely indicate the best choice of treatment.

Patients with mental disorders deserve better. Continue reading…

Could Opening Up the Doors to the World’s Medical Research Save Healthcare?

May 3, 2013• 5

By John Willinsky

What if you had access to all of the medical research in the world? Or better yet, what if the physician treating your particularly complex or rare condition had access to the latest research? Or what if a public health organization in your community could access that research to inform policymakers of measures to advance public health?

“Wait,” you may think, “can’t they already access that research? Doesn’t the Internet make that possible?” While unfortunately the answer to the first question is “No,” fortunately the Internet can make such access possible. As it is today, most physicians and public health professionals have very limited access to health research, almost all of which is published online. Only about a quarter of the research published today ends up being available to those working outside of universities, where libraries subscribe to a good proportion of the research journals.

So, what are these health professionals missing? What difference to their work would access to research make? Cheryl Holzmeyer, Lauren Maggio, Laura Moorhead and I seek to answer these questions with a new National Science Foundation study for which we are currently recruiting physicians and staff of public health NGOs.

We seek to demonstrate the difference it makes to the daily work of these health professionals to have easy electronic access to all the biomedical and public health research – or at least that large proportion held by Stanford University Library – for a period of eleven months (with one month of limited access as a control). To assess the impact of this access, we provide participants with a special portal to the research literature and track when and what research is viewed, while following up with interviews on the use and value of this access.

Box Picking Up Where Google Health Left Off

May 3, 2013• 2

By Missy Krasner

You probably saw some of the headlines last week where Box announced that is supporting HIPAA and HITECH compliance, signing Business Associate Agreements, (BAAs) and integrating with several platform app partners such as Doximity, drchrono, TigerText, and Medigram to help seed its new healthcare ecosystem. I also announced that I was formally advising Box on their healthcare strategy.

I was drawn to Box because of all the lessons I learned at Google building a consumer-directed, personal health record (PHR), Google Health. Google Health allowed you to securely store, organize and share all of your medical records online and control where your data went and how it was managed. It was unlike the other PHRs in the industry that were tethered to the provider or payor or part of an Electronic Health Record (EHR) system.

Sound good? Well, it was in theory. The big issue with Google Health was aggregating your data from the disparate sources that stored data on you. We had to create a ton of point-to-point integrations with large health insurance companies, academic medical centers, hospitals, medical practices and retail pharmacy chains. All of these providers and payors were covered entities in the world of HIPAA and were required to verify a patient’s identity before releasing any data to them electronically. It was a very bumpy user experience for even the most super-charged, IT savvy consumer.

Misunderstanding Oregon

May 2, 2013• 32

By Ashish Jha, MD

Much has already been written about the Oregon Medicaid study that just came out in the New England Journal of Medicine. Unfortunately, the vast majority is reflex, rather than reflection. The study seems to serve as a Rorschach test of sorts, confirming people’s biases about whether Medicaid is “good” or “bad”.

The proponents of Medicaid point to all the ways in which Medicaid seems to help those who were enrolled – and the critics point to all the ways in which it didn’t. But, if we take a step back to read the study carefully and think about what it teaches us, there is a lot to learn.

Here is a brief, and inadequate, summary (you should really read the study): In 2008, Oregon used a lottery system to give a set of uninsured people access to Medicaid. This essentially gave Kate Baicker and her colleagues a natural experiment to study the effects of being on Medicaid.

Those who won the lottery and gained access were compared to a control group who participated in the lottery but weren’t selected. Opportunities to conduct such an experiment are rare and represent the gold standard for studying the effect of anything (e.g. Medicaid) on anything (like health outcomes).

Two years after enrollment, Baicker and colleagues examined what happened to people who got Medicaid versus those who remained uninsured. There are six main findings from the study. Compared to people who did not receive Medicaid coverage:

People with Medicaid used more healthcare services – more doctor visits, more medications and even a few more ER visits and hospitalizations, though these last two were not statistically significant.
People with Medicaid were more likely to get lots of tests – some of them probably good (cholesterol screening, Pap smears, mammograms) and some of them, probably bad (PSA tests).
People with Medicaid, therefore, not surprisingly, spent more money on healthcare overall.

Evidence That Health Does Not Equal Healthcare? Early Results From the Oregon Experiment Are In

May 2, 2013• 17

By Mike Miesen

The most important study in American health policy in decades, the Oregon Health Insurance Experiment, published two-year results Wednesday in the New England Journal of Medicine. If you’re reading up on the topic, get ready for bombastic claims and scorching heat as opposed to illuminating light. The quick read leads to an easy Drudge headline – “MEDICAID DOESN’T MAKE PEOPLE HEALTHIER: OBAMACARE WILL FAIL!” – but a fuller reading of the evidence provides a more optimistic, and honest, take.

In 2008, Oregon had 90,000 individuals who wanted to enroll in its Medicaid program, but the funding to enroll only a fraction. So it decided to use the opportunity to create an unparalleled experiment: the first Randomized Controlled Trial (RCT) – the gold standard research methodology that is able to isolate the causal effect of an intervention – in Medicaid history. It endeavored to show nothing less than the actual, causal effect that Medicaid has on its population, a first in the field.

This study, in other words, is a big, big deal.

Two years of data are in, and the results are mixed. First up, the disappointing: Medicaid coverage.

Obamacare’s Birth Control Mandate: The Most Controversial Legislation Ever?

May 2, 2013• 5

By Dan Diamond

The war over the Affordable Care Act may be over, but one battle shows no signs of waning.

The fight over Section 2713 of the Public Health Services Act under ACA’s Section 101 — better known as the health law’s regulation on preventive services — centers on contraception.

The benefit essentially calls for health plans to cover birth control and other services with no additional cost-sharing for enrollees.

But critics quickly seized on the administration’s initial proposal in 2011, which carved out an exception for “religious employers” — such as churches — but not for “religiously affiliated” employers — such as Catholic hospitals. As a result, HHS delayed implementation for religiously affiliated employers by a year but still required them to comply with the mandate.

In February, the White House released another accommodation for religiously affiliated employers. Yet rather than lay the issue to rest, the administration’s proposed amendments drew more than 400,000 comments — the most comments on any government regulation tracked by the Sunlight Foundation.

It’s just the latest salvo in an ongoing controversy. Opponents have filed more than 60 legal challenges against the benefit. Some have called it a “war on religion.”

While the sheer volume is astounding, there’s little mystery behind the root cause.

The contraception benefit touches on a half-dozen pressure points: Politics. Religion. Sex. Federal mandates. Federal entitlements.

“Our health care system is the dumping ground for all of our worst, unresolved arguments as a society,” J.D. Kleinke writes at The Health Care Blog. And the changes at the heart of Obamacare “spark every remaining culture war,” he adds.

And a mandate related to birth control is especially fraught.

Fact Check:Will Increased Longevity Bring Down Medicare?

May 1, 2013• 18

By Richard Kaplan

The Sound Bite:

Increased longevity costs will bankrupt medicare.

Fact or Fiction?

This is partly fact, partly fiction. Medicare entitlement begins when a person ages in at 65, however just because beneficiaries are living longer does not necessarily mean higher Medicare costs.

The customary formulation of this myth is that Medicare is doomed by its own success in keeping its beneficiaries alive. Not only will the ranks of the program’s beneficiaries increase as the vaunted baby boom generation reaches the statutory age of eligibility, but because people are staying alive longer, Medicare’s costs will explode. The first part of this contention is indisputably true: entitlement to Medicare occurs when a person reaches age sixty-five, and the baby boom generation that is generally calibrated as starting in 1946 has arrived at that threshold. As a result, additional Medicare beneficiaries enter that program every day, and because the baby boom generation dwarfs any preceding age cohort, it is highly likely that more beneficiaries will be added to the program than are lost as older beneficiaries pass away. Consequently, the number of Medicare beneficiaries will inexorably increase over the next decade or so. Ceteris paribus, more beneficiaries mean higher aggregate costs.

The second part of the contention, however, is myth. Just because today’s Medicare beneficiaries live longer than did their predecessors does not necessarily translate into higher costs for the Medicare program. The source of this apparently counterintuitive proposition is the panoply of programmatic limitations that Medicare imposes on its coverages, regarding the myth that Medicare pays for long-term care. More specifically, beneficiaries who live longer typically do incur higher cumulative health care costs over their post-sixty-five lifetimes, but many of those costs are not borne by the Medicare program. This phenomenon is well illustrated by the following graph from an important analysis that appeared in The New England Journal of Medicine:

FIGURE 1: Cumulative Health Care Expenditures From the Age of 65 Years Until Death, According to the Type of Health Service and the Age of Death

How to Find a Neurosurgeon On Craigslist

May 1, 2013• 9

By COLIN SON, MD

An uninsured Seattle man has put out an ad offering to trade his 2006 Mustang GT for brain surgery. He provides an image from a MRI of his brain even. The poster doesn’t describe what symptoms he attributes to his arachnoid cyst but the relationship between arachnoid cysts and late symptoms is often difficult to establish.

Arachnoid cysts have been associated with headaches, nausea, seizures, vertigo and even in anecdotal cases with psychiatric symptoms or the onset of dementia. But the relationship is often hard to establish. Up to a third of people with chronic headaches have some sort of abnormality on there MRI, including arachnoid cysts. Relating the findings and the symptoms is often difficult; sometimes you have a finding on an MRI or a CT scan but it is a red herring as far as the symptoms are concerned.

Arachnoid cysts are collections of cerebrospinal fluid trapped between the brain and spinal cord and the arachnoid membrane. They’re primarily a congenital entity but can be associated with trauma, infection or be iatrogenic following surgery. The vast majority of cysts are discovered incidentally and associated with no major symptoms. While even asymptomatic cysts can progress to cause symptoms and they can be associated with post traumatic, or even spontaneous, hemorrhage the risk of such is low enough that in small asymptomatic cysts it is often more than reasonable to do nothing.

I’m a little bit dubious of the poster as he relates that he’s been thinking of trying to get to the cyst himself. However, if it’s an honest post I think the poster really needs to sit down with a neurosurgeon in consultation and go over the above in detail and discuss the best course of action.

I suppose health insurance is coming in 2014.

Colin Son, MD is a neurosurgical resident in Texas. He blogs regularly at Residency Notes, where this post originally appeared.

A Health Insurance Exchange That Won’t Be a “Train Wreck”

May 1, 2013• 3

By Robert Laszewski

Every week, I get an email from the Maryland Health Connection––the state run health insurance exchange.
Maryland is one of a minority of states that are building their own Affordable Care Act (“ObamaCare”) exchange.

You can go to their site and sign up for these weekly updates.

Let me suggest that Maryland is an example of what an on-track and well organized effort looks like for any exchange hoping to be ready to enroll people on October 1––and ensure that they will be covered should they walk into a doctor’s office on January 1, 2014.

Maryland is simply ticking through all of the key milestones they must meet. The latest release reviewed its efforts to launch the connector program (those who will assist people in signing up), the status of the carrier filings (Maryland Blue Cross has filed for an average increase of 25% for individual coverage warning young people could pay as much as 150% more), the timelines for carrier submissions of coverage packages, and they outlined their third party administration program to be able to launch the small business choice (SHOP) option––unlike the federal exchange Maryland will have the SHOP option.