Author Archives

Matthew Holt

A Permanent “Doc-Fix” Remains Elusive

Jul 5, 2010• 7

By NAOMI FREUNDLICH

For now, all those physicians who threatened to make a mass exodus from Medicare can take a breather. Last week, the House voted to once again delay the mandated 21% cut in physician fees by another six months; thereby ensuring that the fight over the sustainable growth rate (SGR) will be resurrected sometime around Thanksgiving.

So far, Congress has kicked the SGR can down the road 10 times since 2003—four times just this year alone. The targets have long been considered unobtainable and the mandated physician payment cuts are opposed in Congress by Democrats as well as Republicans and supported by nearly no one. The level of anxiety among doctors continues to escalate every time the issue is raised—even though the cuts have never gone into effect for more than a couple of weeks. Why not get rid of this devilishly frustrating formula once and for all?

The short answer is that getting rid of the SGR—even though it has never led to any savings in Medicare—is just too expensive on paper. The Congressional Budget Office establishes a “baseline” projection of future spending and revenue that takes into account that all current laws will be enforced. Legislation that eliminates the SGR targets would then be scored by the CBO as adding to the deficit—to the tune of $276 billion between 2011 and 2020 even if Medicare payment rates to doctors were frozen at 2009 levels. In the current economic climate, it will be very hard to get enough members of Congress to agree to a permanent “doc fix” that eliminates the SGR targets without also finding a way to pay for it.

The Not For-Profit / For-Profit Divide

Jul 2, 2010• 11

By PAUL LEVY

Many people involved in hospitals wonder how it can be financially prudent for investors to put their money into for-profit ventures that buy non-profit hospitals. (Examples here and here.) After all, the argument goes, the newly privatized entities will have to pay taxes, issue taxable rather than tax-exempt debt, lose the benefit of philanthropy, and otherwise be at a competitive disadvantage compared to their antecedents.

In answer, some might make the case that for-profit firms will run hospitals more efficiently. But this is an unproven and unreliable basis for such transactions. Even if there were some efficiency gains, they would be unlikely to offset the additional costs listed above.

No, the answer lies in the risk-reward expectations of equity investors and of purchasers of high-yield taxable debt.* Those expectations are quite different from purchasers of the municipal or other tax-exempt bonds that support the capital needs of non-profit hospitals. It is the difference between a forward-looking, optimistic view of the world and a backward-looking, cautious view of the world.

Let’s start with the tax-exempt debt market, one characterized by risk-averse investors focused on debt coverage ratios and other protections built into indenture agreements.

The rating agencies who serve these investors look at the past performance of the non-profit hospitals and ask, “What could go wrong in the future that might put debt service at risk?” There is a highly limited pool of people interested in such debt, and when ratings fall to near or below investor grade, the number of investors becomes smaller still.

Contrast this with people willing to risk their money in the for-profit world. They are sold on the potential for financial gain, not on the proposition of protecting principal. Those offering this paper present business plans and pro forma’s based on what might be. Sure, due diligence allows an assessment of the downside, but this pool of investors has hedged their bets by building a diversified portfolio.Continue reading…

Consenting Technologies

Jul 2, 2010• 25

By MARGALIT GUR-ARIE

Yesterday, ONC held a fine gathering at the Grand Hyatt in Washington DC. There were experts, ONC Tiger team members and cutting edge technology vendors displaying and discussing platforms and software for providing patients the opportunity to define granular consent to the sharing of their electronic medical records down to a data element level.

Somewhere in the midst of watching that fabulous and very complex technology, it occurred to me that I don’t quite understand why we are discussing all these things. Obviously, we all agree that patients have a right to privacy, and as HIPAA outlines, our medical records ought to be protected from wanton disclosure without our permission. However, the showcased products and the ensuing conversations at the Grand Hyatt were on a completely different level of sophistication.

Physicians have been exchanging patient records since medical records were invented. Today, patients are signing the obligatory HIPAA forms giving health care providers permission for these exchanges, and most doctors use fax, phone, courier (usually the patient) and occasionally secure email to exchange medical records. A typical scenario would be a PCP making a referral – a letter summarizing the problem is usually written, some test results could be attached, a big yellow envelope with some film may be handed to the patient to bring to their specialist appointment. Physicians equipped with EHRs are doing pretty much the same, in a more automated fashion. We do not consider this an invasion of privacy.

THCB Corporate sponsors include

Jul 2, 2010• 1

Op Ed: Make It Simple, Please!

Jul 1, 2010• 1

By ALAN WEIL, JD

The Patient Protection and Affordable Care Act creates a continuous set of coverage options for every American with income below 400 percent of the federal poverty level, or about half of the nation’s population. Sounds simple, right? To participating families it needs to be, but it will take a tremendous amount of work and creativity on the part of states and the federal government to achieve this vision.

The Affordable Care Act’s guarantee of coverage is actually a patchwork quilt that includes Medicaid, the Children’s Health Insurance Program, employer-sponsored coverage, and plans purchased with subsidies through the new insurance exchanges. While almost everyone will be eligible for some form of coverage, the source of coverage matters because it determines the benefit package, the cost-sharing provisions (deductibles and co-pays), and how costs are allocated between state and federal governments.

Dr. Berwick’s Last Stand?

Jun 29, 2010• 50

By MAGGIE MAHAR

Kaiser Health News (KHN) reports that “the nomination of Dr. Donald Berwick to run the agency overseeing Medicare appears to be languishing.” Friday, KHN’s “Health Policy Week in Review” quoted a story that appeared in the New York Times a few days earlier:

“Hospital executives who have worked with Dr. Berwick describe him as a visionary, inspiring leader. But a battle has erupted over his nomination, suggesting that Dr. Berwick faces a long uphill struggle to win Senate confirmation. Republicans are using the nomination to revive their arguments against the new health care law, which they see as a potent issue in this fall’s elections, and Dr. Berwick has given them plenty of ammunition. In two decades as a professor of health policy and as a prolific writer, he has spoken of the need to ration health care and cap spending and has confessed to a love affair with the British health care system.”

KHN also points out that according to The Hill, although Senate leaders are nearing an agreement to allow more than 60 Obama nominees to be approved to begin work, Berwick is not on the list . “‘He will not get unanimous consent,’ a spokesman for Senate Minority Leader Mitch McConnell (R-Ky.) told The Hill.

I am not at all persuaded that Berwick’s confirmation is in trouble. As the highly-respected president and CEO of the Institute for Health Care Improvement, Dr. Berwick enjoys support that ranges from the AARP to three former directors of the Centers for Medicare and Medicaid (CMS) who served under Republican presidents. “This is not really about Don Berwick,” John Rother, executive vice president for policy and strategy at the AARP told McClatchy Newspapers. “In ordinary times, the nomination of somebody with Don’s record and standing in the field would not be controversial.” Thomas Scully, who led the CMS under President George W. Bush agrees: “He’s universally regarded and a thoughtful guy who is not partisan. I think it’s more about … the health care bill. You could nominate Gandhi to be head of CMS and that would be controversial right now.”Continue reading…

The Top 10 Generics

Jun 29, 2010• 1

By ED PULLEN, MD

Many of the breakthrough drugs of the 1980-1990′s are now available
as generics, and pharmacy competition has led to great bargains for
patients needing these drugs.

The 1980’s and 1990’s were a golden age in the development of great
new drugs to treat many common and uncommon diseases. Prior to that
time it was very difficult to treat depression, hypertension,
diabetes, and congestive
heart failure. It was nearly impossible to treat high cholesterol.
Breakthrough drugs like the SSRI
antidepressants, ACE
inhibitors and calcium
channel blockers for hypertension, metformin
for diabetes, and several drugs in combination for congestive heart
failure came to market, and have revolutionized the care of many of
these chronic diseases. Now the great news it that many of these drugs
are available as generics, and competition between retail pharmacies has
led to incredibly cheap medication. Here is my top ten list of great
generic medications.

ACE inhibitors. I tend to use lisinopril, but
several others are also available. These meds are effective at
controlling high blood pressure, but have also been shown to prevent
heart attacks in patients post MI, to prolong life and reduce
hospitalizations in congestive heart failure, to prevent diabetes
related kidney failure, and is usually extremely well tolerated. A
small percent of patients get a cough, and even smaller percent are
allergic to these medications.
Statins This class of LDL cholesterol lowering drugs has made effective treatment of high cholesterol practical and simple. Several have gone generic including simvastatin, lovastatin, and pravastatin. Although simvastatin (Zocor) is not on the chain pharmacy $4. drug lists, it is quite inexpensive ($10.90/ 100 40mg doses at Costco) and is effective enough for most patients to achieve goal LDL cholesterol levels. Many studies have shown statins to be effective at lowering rates of various cardiovascular diseases.

Heavy Words

Jun 28, 2010• 21

By ROB LAMBERTS, MD

The post that forever doomed the world to have my writing forced onto them was one called Shame, in which I describe my frustration with how society stigmatizes people who are obese. It was picked up by the NY TImes Health Blog and got a good conversation about the subject going on the blog-o-sphere.

A recent article in EverythingHealth (via Better Health) got me thinking again about the subject of society’s response to the “obesity epidemic.” The article discusses a recent study that showed…well, read it for yourself:

Talk about a cruel trick of nature! A study funded by the National Institutes of Health (NIH) and published in JAMA shows that physical activity prevents weight gain in middle-aged and older women ONLY IF THEY ARE ALREADY AT IDEAL WEIGHT. Did you read that? It means that the recommended guidelines advocating 150 minutes of exercise a week isn’t sufficient to prevent weight gain in most middle age women.

The author, Dr. Toni Brayer, ends the post by saying:

So what are we to think about this study? First, caloric restriction is the only way to maintain or lose weight. The health benefits of exercise have been proven over and over in thousands of studies and that is not in dispute. But weight control demands caloric restriction, period.

I am sorry about these results. Truly I am.

Hearing the frustration from my patients (male and female), and struggling with weight myself, I have to say that this is not really that surprising. Losing weight is not easy. Let me say that again: losing weight is not easy. There are lots of reasons it is difficult to lose weight, from the food-oriented culture to a person’s own metabolism. There are emotional and addictive aspects to obesity as well. This study puts scientific evidence behind the hardness of weight loss.Continue reading…

Contradictions in Massachusetts

Jun 28, 2010

By PAUL LEVY

I have written before
about the strange things going on in the Massachusetts health care
insurance market. For those from out of state, here are some quotes
that will give you a sense of the contradictions in the public policy
arena.

They are, respectively, from two stories that appeared on
the same day in the Boston Globe:
"Rate
cap for insurer overturned" and "Officials
give up cutting health perks."

(1) An insurance appeals board yesterday overturned the state’s
cap on health premium increases for small business and individual
customers covered by Harvard Pilgrim Health Care . . . [finding] that
rate increases Harvard Pilgrim initially sought in April are
reasonable given what it must pay to hospitals and doctors. That ruling
trumped the Insurance Division’s earlier finding that the requested
increases were excessive.

(2)
The state’s public employee unions won a major victory this week when
the Legislature abandoned efforts to allow cities and towns to trim
generous health care benefits enjoyed by thousands of municipal
employees, retirees, and elected officials.

You can read
the rest and related stories, but what is most disturbing is that the
spirit of cooperation and compromise that existed when Massachusetts
approved its health
care reform law in 2006 has broken down. Part of the reason is
that commitments made at that time have not been delivered upon. For
example, the state had promised to lift Medicaid payment rates to
something closer to the cost of delivering that service. Once the
economy sank and state budgets were stressed, that was not possible.
This left providers needing to collect more of their income from private
insurers.

What’s New With McKesson HS

Jun 28, 2010• 4

By Matthew Holt

At the AHIP Conference I got a chance to sit down with McKesson Health Solution's Senior VP of Care Management Jim Hardy and VP of Product Development Kevin Maher. The two men were more than happy to share with me some new products that McKesson HS has developed. One product is the Personal Health Advisor that was introduced in the beginning of this year.