Category: Health Policy

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

Apr 1, 2019• 3

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.

A Change in Tactics

Mar 6, 2019• 3

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 54^thglobally, 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.

Are Bipartisan Agreements on Health Care Possible?

Dec 24, 2018• 10

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.

THCB Exclusive–Trump appoints Holt to run VA

Apr 1, 2018• 6

By THCB STAFF

Today Donald Trump pulled a big surprise. He changed the much criticized appointment for his new VA head from over-effusive physician Rear Adm. Ronny Jackson to well known lefty health blogger Matthew Holt. When asked why he wanted Holt to run the VA Trump said, “Look, I’m pretty smart and I’ve appointed now only the best people like John Bolton and Mike Pompeo to run our foreign policy. If I appoint someone else I like, how can I fire him quickly? That Holt guy seems to hate me, and he’s never stayed in one of my hotels, so he’s perfect for the VA–I hear that the accommodation is a bit rough, not exactly a ten.”

When THCB asked Holt why he agreed to take the job running the VA, he suggested that it had a lot to do with his English roots. “As most of my followers know I grew up in England and like the concept of everyone suffering together in a government funded and provided socialized National Health System. The VA and its fellow traveler the DOD is the only health system like that in America and it’s a brilliant place to start”. When asked about his likely future polices for the VA, Holt suggested that massive expansion was the key initiative. In a written statement, his VA spokesman noted “Given the utter lunacy of the Trump Administration and the crazy warmongers now running the show, the chances of total war versus North Korea and Iran are very high. So essentially everyone in the country will soon be called up to the military, which means that soon eventually everyone will be a Veteran. And if Trump loses in 2020, by 2021 we’ll be at war with the Russians so either way my theory pays off.”

Holt was on the Charlie Rose show last week when he told Rose about his philosophy for the future. “When everyone in the country is part of the VA, we can shut down that ineffective and expensive private health system, and instead everyone can get their care the way I think is best. And if they don’t like it Rasu Shrestha will send them their records using the Lighthouse Blue Button Carrier Pigeon system, and we’ll give them a row boat to head to Nepal or somewhere.

When TCHB reached him for comment, Cato health spokesman Michael Cannon said, “if you are going to expand this universal health care stuff, you might as well give it a real go. Lucky for me, I have bone spurs…”

ACA Repeal and the Ethics of Belief

Jan 23, 2017• 4

By DAVID INTROCASO

An elderly patient presents to a physician with symptoms of pneumonia. The physician ignores accepted medical standards of care and chooses to believe the patient suffers from a cold or flu. The patient dies of pneumonia. What evidence informs our beliefs, or how we arrive at our beliefs, is as important as what they are.

In 1877 a Cambridge mathematician and philosopher, William Kingdon Clifford, published an essay titled, “The Ethics of Belief.” 1 In it, Clifford imagined a ship owner “about to send to sea an emigrant ship” that he knew “was old, and not overwell built at the first.” Knowing the ship had possibly become unseaworthy, he realized he ought he to have “her thoroughly overhauled and refitted.” Despite this knowledge, the ship owner succeeds in convincing himself that since the ship had “gone safely through so many voyages and weathered so many storms” it would do so again. If the ship goes “down in mid-ocean and told no tales” what, Clifford asked, shall we say of the owner? “Surely this, that he was verily guilty of the death of those men.” Though the ship owner may have come to believe in the soundness of his ship, “the sincerity of his conviction can in no wise help him,” because the owner, “had no right to believe on such evidence was before him.” “He had acquired his belief not by honestly earning it in patient investigation,” but by “stifling his doubts.”

Men, Women and Health Care Pricing Theory: Speaking Different Languages

Jun 9, 2016• 20

By JEANNE PINDER

flying cadeucii Men and women in the United States think very differently about health care costs. When I talk about the topic, it’s common for me to see half of my listeners zoning out — the male half. Why? Well, because women make or influence 90 percent of the health care decisions in this country, according to a study by the American Academy of Family Physicians. Of course, men go to the doctor. But they make fewer health care decisions, and they don’t think about pricing the same way women do.

Women are more in touch with health care pricing and more affected by it than men. Women own reproductive health. Women make pediatricians’ appointments and run elder care. Women nag their spouses, be those spouses husbands or wives or none of the above, to get their cholesterol checked, to pick up a prescription, to go to that physical therapy appointment.

So when we talk about shopping for health care, about our business, we’ve grown accustomed to having dudes say “Hm, interesting, can we talk about wearable devices?” or “We have some big data, we’re not really interested in the prices.” At the same time, women tell us how excited they are that we’re attacking opacity in health care pricing.

PCMH Fails Natural Experiment

Mar 14, 2016• 9

By AL LEWIS

Medical Homes Fail Yet Another “Natural Experiment”

Three “natural experiments,” three failures. Such is the fate of patient-centered medical homes (PCMH), a well-intentioned but unsuccessful innovation now kept afloat by the interaction of promoter study design sleight-of-hand with customer innumeracy.

By way of review, a natural experiment is an experiment in which the design is outside the control of investigators, yet mimics an experiment. The first two natural experiments below involve applying the intervention across entire states. The third involves a stimulus-response experiment in one specific community.

Statewide Natural Experiments: North Carolina and Vermont

In North Carolina, a statewide Medicaid PCMH was implemented years ago and steadily expanded until most Medicaid recipients belonged to one. There was no reduction in relevant event rates (for ambulatory care-sensitive admissions) and costs increased. While the overall Medicaid budgets were routinely exceeded and that should have caused legislators to realize that something in their PCMH was amiss, Milliman fabricated data to pretend the PCMH program was a success. Milliman got caught making up data (and ignoring other data that quite definitively invalidated its conclusion, and changed their story 180 degrees, a tacit admission that they lied. And shortly thereafter (at least “shortly” by the standards of state government), North Carolina announced that it is abandoning this failed experiment.

Have Doctors Joined the Working Class?

Sep 26, 2014• 19

By Richard Gunderman, MD

On September 28, 1864, exactly 150 years ago this weekend, the first meeting of the International Workingmen’s Association (IWA) was convened at St. Martin’s Hall, London. Among the attendees was a relatively obscure German journalist by the name of Karl Marx. Though Marx did not speak during the meeting, he soon began playing a crucial role in the life of the organization, in part because he was assigned the task of drafting its founding documents.

The work of the IWA and Marx is increasingly relevant to the practice of medicine today, largely because of the rapidly shrinking percentage of US physicians who own their own practices. This moves physicians into the category of what Marx and his associates called, “working people.” According to data from the American Medical Association, in 1983 76% of physicians were self-employed, a number that had fallen in 2012 to 53%. And the trend is accelerating. It is estimated that in 2014, 3 in 4 newly hired physicians will go to work for hospitals and health systems.

To put this change in Marx’s terms, the rapid fall in physician self-employment means that a shrinking percentage of physicians own what he called the means of production. In his view, this alienates workers – in this case physicians – from other physicians, themselves, the work they do, and from patients. Whether we agree with Marx on every point, his writings on this topic provides a provocative perspective from which to survey the changing landscape of contemporary medicine.

Halbig corpus interruptus

Jul 23, 2014• 59

By MATTHEW HOLT

In more stunning proof that America’s 18th century style governing process just doesn’t work, a subset of a regional Federal court ruled against part of Obamacare. The Halbig ruling is certain to be overturned by the full DC court and then probably will stay that way after it makes it’s way through the Supremes–at least Jonathan Cohn thinks so.

But think about what the Halbig ruling is about. Its proponents say that when Congress (well, just the Senate actually as it was their version of the bill that passed) designed the ACA, they wanted states only to run exchanges and only people buying via states to get subsidies. But that they also wanted a Federal exchange for those states that couldn’t or (as it turned out) wouldn’t create their own. But apparently they meant that subsidies wouldn’t be available on the Federal exchange. That would just sail through Logic 101 at any high school. Well only if the teacher was asleep, as apparently most Senators were.

Now two judges interpret what was written down to imply that subsidies should only be available on state exchanges–even though logic, basic common sense and fairness would dictate that if we’re going to subsidize health insurance we should do it for everyone regardless of geography.

Don’t forget that in the House version of the bill there was only a Federal exchange. Continue reading…

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

Dec 31, 2013• 94

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.