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Category: Health Policy

Economics Lessons from the Subcontinent: India’s Coronary Stent Policy

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By ANISH KOKA MD

It is commonly believed that deliberate, careful price regulation by enlightened technocrats trumps the haphazard and chaotic regulation of prices imposed by the free market—especially when the market is subject to greed and corruption.

A most interesting case study challenging that belief comes courtesy of the largest Democracy in the world: India.

In 2017, an arm of the Indian Government, the National Pharmaceutical Pricing Authority (NPPA) took action to control the price of coronary stents in India by capping their retail price.  The problem that stimulated this action was their exorbitant price that made them unaffordable to many Indians.

The retail prices of US made drug-eluting stents ranged from Rs 80,000 – 150,000 (~$1000 – ~$2000), while the price of Indian made drug-eluting stents ranged from Rs 45,000 – 90,000 (~$600 – ~$1200).  Considering that a good job for 90% of the Indian labor force pays about Rs 180,000 per year, these prices put most coronary stents out of the reach of a vast swath of the populace.

What regulators knew, however, was that the price point at which coronary stents were being imported into India was a fraction of the price being charged to Indians.  The up-charge had everything to do with what happened after the stent was brought onto Indian soil: The Indian subsidiary of the US stent manufacturer would sell its product to a domestic distributor that would then employ all means necessary to ensure their stent was chosen by cardiologists to be implanted.

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A Change in Tactics

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By ROBERT PRETZLAFF MD, MBA

Those that advocate for change in healthcare most often make their case based on the unsustainable cost or poor quality care that is sadly the norm. A 2018 article in Bloomberg highlights this fact by reporting on global healthcare efficiency, a composite marker of cost and life expectancy. Not remarkably, the United States ranks 54th globally, down four spots from 2017 and sandwiched neatly between Azerbaijan and Bulgaria. Unarguably, the US is a leader in medical education, technology, and research. Sadly, our leadership in these areas only makes our failure to provide cost-effective, quality care that much more shameful. For the well-off, the prospect of excellent accessible care is bright, but, as the Bloomberg article points out, as a nation our rank is rank. Anecdotally, I can report that as a physician I am called upon with some regularity to intervene on the behalf of family and friends to get a timely appointment or explain a test or study that their doctor was too busy to explain, and so even for the relatively well-off, care can be difficult and deficient.

The cost of care frequently takes center stage in arguments advocating change. The recognition that health care costs are driving unsupportable deficits and limiting expenditures in other vital areas is very compelling. Therefore, lowering the cost of care would seem to be an area in which there would be swift consensus. However, solutions to rein in costs fail to address the essential truth that most of us define cost subjectively. Arguments about the cost of care divide rather than unify as the discussion becomes more about cost shifting than controlling overall cost. Further, dollars spent on healthcare are spent somewhere, and there are many who profit handsomely from the system as it is and work aggressively sowing division to maintain the status quo.

Poor quality and access are additional lines of argument employed to win support for change. These arguments fail due to a lack of a commonly accepted definitions of quality and access to care. Remedies addressing quality and access issues are frequently presented as population level solutions. Unfortunately, these proposals do not engage a populace that cares first and foremost about their access to their doctor. The forces opposed to change readily employ counterarguments to population-based solutions by applying often false, but effective, narratives that population-based solutions are an infringement on a person’s fundamental freedoms. In that counterargument is the key to improving healthcare.

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Are Bipartisan Agreements on Health Care Possible?

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By KEN TERRY 

Republicans and Democrats are seen as poles apart on health policy, and the recent election campaign magnified those differences. But in one area—private-sector competition among healthcare providers—there seems to be a fair amount of overlap. This is evident from a close reading of recent remarks by Health and Human Services Secretary Alex Azar and a 2017 paper from the Brookings Institution.

Azar spoke on December 3 at the American Enterprise Institute (AEI), the conservative counterpart to the liberal-leaning Brookings think tank. Referring to a new Trump Administration report on how to reduce healthcare spending through “choice and competition,” Azar said that the government can’t just try to make insurance more affordable while neglecting the underlying costs of care. “Healthcare reform should rely, to the extent possible, on competition within the private sector,” he said.

This is pretty close to the view expressed in the Brookings paper, written by Martin Gaynor, Farzad Mostashari, and Paul B. Ginsburg. “Ensuring that markets function efficiently is central to an effective health system that provides high quality, accessible, and affordable care,” the authors stated. They then proposed a “competition policy” that would require a wide range of actions by the federal and state governments.

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How Can Patients on Medicaid Possibly Be Worse Off than Those Who Don’t Have Insurance?

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By Saurabh Jha, MD

“Extraordinary claims require extraordinary evidence,” said Carl Sagan.

The claim that health insurance improves health outcomes is hardly ground breaking. Studying whether insurance affects health status is like wondering whether three meals a day lead to a higher muscle mass than total starvation.

Well that’s what I thought. Until I read the study on Oregon’s Medicaid program by Baicker and colleagues in the NEJM earlier this year and, more recently, Avik Roy’s short treatise “How Medicaid Fails the Poor”.

Baicker et al found that Medicaid enrollees fared no better in terms of health outcomes than those without insurance. That is, no insurance no difference.

The study is an exemplar of policy research laced with regression equations, control of known confounders and clear separation of variables. There is only so much rigor social science can achieve compared to the physical sciences. Yet this is about as good a study as is possible.

The one thing the study did not lack was sample size. It’s useful to bear in mind sample size. Large effects do not need a large sample size to show statistical significance. Conversely, if study with a large sample size does not show even a modest effect, it means that the effect probably does not exist.

There are several interpretations of the Medicaid study, interpretations inevitably shaped by one’s political inclination. The ever consistent Paul Krugman, consistent in his Samsonian defense of government programs against philistines and pagans, extolled critics of Medicaid as “nuts” and asked, presumably rhetorically, “Medicaid is cheaper than private insurance. So where is the downside?”

Unlike Krugman I am not a Nobel laureate and am about as likely to win a Nobel Prize as I am of playing the next James Bond, so it’s possible that I am missing something blatantly obvious.  Could the downside of a government program paying physicians, on average 52 cents, and as low as 29 cents, for every dollar paid by private insurance in a multiple payer system be access?

Indeed, it’s darn impossible for patients on Medicaid to see a new physician.  As Avik Roy explains “…massive fallacy at the heart of Medicaid….It’s the idea that health insurance equals healthcare”.

But wait. It gets better.

I am accustomed to US healthcare throwing more plot twisters than Hercule Poirot’s sleuth work. But one I least expected was that patients on Medicaid do worse than patients with no insurance (risk-adjusted, almost). I am not going to be that remorseless logician, which John Maynard Keynes warned us about, who starting with one mistake can end up in Bedlam, and argue that if you are for Medicaid that is morally equivalent to sanctioning mass murder. Rather, I ask how it is possible that possessing Medicaid makes you worse off than no insurance whatsoever.

To some extent this may artifactually appear so because poverty correlates with ill health, and studies that show Medicaid patients faring worse than uninsured, cannot totally control for social determinants of health.

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Return to McAllen: A Father-Son Interview

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By IAN ROBERTSON KIBBE


By now, Dr. Atul Gawande’s article on McAllen’s high cost of health care has been widely read.  The article spawned a number of responses and catalyzed a national discussion on cost controls and the business of medicine.  It even made it’s way into the President’s address to the AMA.

Almost overnight, McAllen and the Rio Grande Valley were thrust into the national health care spotlight – the once sleepy border town became, not a beacon on a hill, but a balefire in the valley, representing much of what is wrong with the current medical culture.

But, McAllen wasn’t always like something from an old Western, where doctors run wild and hospital CEO’s compete like town bosses.  I remember McAllen quite differently.  I remember it, because as it turns out, it was where I was born.Continue reading…