In a recent essay, VIVIO Health’s CEO Pramod John guides us through four sensible drug policy changes and supporting rationales that could make drug pricing much fairer. Reading through it, one is struck by the magnitude of the drug manufacturing industry’s influence over policy, profoundly benefiting that sector at the deep expense of American purchasers. As Mr. John points out, the U.S. has the world’s only unregulated market for drug pricing. We have created a safe harbor provision that allows and protects unnecessary intermediaries like pharmacy benefit managers. We have created mechanisms that use taxpayer dollars to fund drug discovery, but then funnel the financial benefit exclusively to commercial interests. And we have tolerated distorted definitions of value – defined in terms that most benefit the drug manufacturers – that now dominate our pricing discussions.
The power of this maneuvering is clear in statistics on health industry revenues and earnings. An Axios analysis of financial documents from 112 publicly traded health care companies during the 3rd quarter of 2018 showed global profits of $50 billion on revenues of $636 billion. Half of that profit was controlled by 10 companies, 9 of which were pharmaceutical firms. Drug companies collected 23% of the total revenues during that quarter, but retained an astounding 63% of the profits, meaning that the drug sector accounts for nearly two-thirds of the entire health care industry’s profitability. Said another way, the drug industry reaps twice the profits of the rest of the industry combined.
This month, we saw historic turnout at the polls for midterm elections with over 114 million ballots cast. One noteworthy observation regarding voter turnout is record rates of participation by younger voters aged between 18 to 29 years old. Around 31 percent of people aged 18 to 29 voted in the midterms this year, an increase from 21 percent in 2014, according to a day-after exit poll by Tufts University.
Surely their political engagement counters the criticism that millennials are disengaged and disconnected with society and demonstrates that millennials are fully engaged when issues are relevant to them, their friends, and their families. Why, then, do we not see the same level of passion, engagement and commitment when young adults are asked to consider their health and well-being?
I have had the privilege of being a member of the National Heart, Lung and Blood Institute-funded Coronary Artery Risk Development in Young Adults (CARDIA) study research team. In over 5,000 black and white adults who were initially enrolled when they were 18 to 30 years old and have now been followed for nearly 35 years, we have described the decades-long process by which heart disease develops. We were able to do this because, in the 1980s when these studies began, young adults could be reached at their home telephone numbers. When a university researcher called claiming to be funded by the government, there was a greater degree of trust.
Unfortunately, that openness and that trust has eroded, particularly in younger adults and those who may feel marginalized from our society for any number of valid reasons. However, the results—unanswered phone calls from researchers, no-shows at the research clinic and the absence of an entire group of adults today from research studies, looks like disengagement. Disengagement is a very real public health crisis with consequences that are as dire as any political crisis. Continue reading…
But ACOs could pave the way for more significant cost-cutting based on competition.
By KEN TERRY
The Medicare Shared Savings Program (MSSP), it was revealed recently, achieved a net savings of $314 million in 2017. Although laudable, this victory represents a rounding error on what Medicare spent in 2017 and is far less than the growth in Medicare spending for that year. It also follows two years of net losses for the MSSP, so it’s clearly way too soon for anyone to claim that the program is a success.
The same is true of accountable care organizations (ACOs). About a third of the 472 ACOs in the MSSP received a total of $780 million in shared savings from the Centers for Medicare and Medicaid Services (CMS) in 2017 out of the program’s gross savings of nearly $1.1 billion. The other MSSP ACOs received nothing, either because they didn’t save money or because their savings were insufficient to qualify them for bonuses. It is not known how many of the 838 ACOs that contracted with CMS and/or commercial insurers in 2016 cut health spending or by how much. What is known is that organizations that take financial risk have a greater incentive to cut costs than those that don’t. Less than one in five MSSP participants are doing so today, but half of all ACOs have at least one contract that includes downside risk.
As ACOS gain more experience and expand into financial risk, it is possible they will have a bigger impact. In fact, the ACOs that received MSSP bonuses in 2017 tended to be those that had participated in the program longer—an indication that experience does make a difference.
However, ACOs on their own will never be the silver bullet that finally kills out-of-control health spending. To begin with, 58 percent of ACOs are led by or include hospitals, which have no real incentive to cut payers’ costs. Even if some hospitals receive a share of savings from the MSSP and/or private insurers, that’s still a drop in the bucket compared to the amount of revenue they can generate by filling beds instead of emptying them. So it’s not surprising that physician-led ACOs are usually more profitable than those helmed by hospitals.
Seema Verma, the Trump appointee who runs Medicare, has had an active week. The problem facing much-beloved Medicare is one that faces every other government-funded healthcare extravaganza: it’s always projected to be running out of money. Medicare makes up 15% of the total federal budget. That’s almost $600 billion dollars out of a total federal outlay of $4 Trillion dollars. The only problem here is that revenues are around $3.6 trillion. We are spending money we don’t have, and thus there there is constant pressure to reduce federal outlays.
This is a feat that appears to be legislatively impossible. The country barely is able to defund bridges to nowhere let alone try to reduce health care spending because, as everyone knows, any reduction in health care spending will spawn a death toll that would shame the black plague. The prior administration’s health policy wonk certified approach was to change the equation in health care from paying for volume to paying for value. This, we were assured, would allow us to get better healthcare for cheaper! And so we got MACRA, The Medicare Access and CHIP Reauthorization Act, that introduced penalties for doctors unable to provide ‘good’ care. Never mind that in some years good care means you treat everyone with a statin, and in others it means treat no one with a statin. When in Rome, live like the Romans. In 2018 parlance, that roughly translates to “check every box you can and everything will be all right.”Continue reading…
THCB readers may recall last year in early June when the Trump administration announced it would withdraw from the 2015 Paris climate accord and earlier this January when the World Economic Forum met to discuss its global risk report that included the chapter, “Our Planet on the Brink,” I discussed in part (here and here) the health care industry’s indifference to global warming (See also my related 3 Quarks Daily essay.) Now comes the United Nation’s Intergovernmental Panel on Climate and Change’s (IPCC’s ) latest report. Once again overwhelming scientific evidence that confirms life as we know it on this planet will soon cease to exist is received with apathetic insouciance.
Created in 1988 the IPCC is considered the world’s definitive scientific body on climate change and co-winner with Al Gore of the 2007 Nobel Peace Prize, finalized in early October its report, “Global Warming of 1.5°C.” The 2015 Paris accord called for the report. It was prepared by nearly one hundred scientists who analyzed thousands of the most recent scientific evidence. The report’s summary was accepted by over 180 countries including the American and Saudi Arabia delegation during the IPCC’s meeting recently concluded in South Korea.
What is newsworthy about the IPCC report is its conclusion that keeping or holding temperature increases below 2°C, the goal of the Paris agreement, would not avoid the catastrophic effects of global warming. At 1.5°C life on this planet would suffer serious or dire harm, at 2°C catastrophic harm. Specifically, the report compared the impact between a 1.5°C (2.7°F) increase in temperature with a 2°C (3.6°F) increase (The earth has already warmed by 1°C since the pre-industrial era). Among numerous other findings, should temperatures increase to 1.5°C, the report found of 105,000 species studied, four percent of vertebrates (that include us), eight percent of plants and six percent of insects would lose half of their climatically-determined geographic range. At 2°C, the percents double to triple. Global crop yields will decline significantly. At 1.5°C we will lose 70 to 90 percent of coral reefs, at 2°C there will be a 99 percent loss. At 1.5°C Marine fishery losses or the global annual catch loss would be 1.5 million tons, at 2°C they double.
While women make up more than half of the U.S. population, an imbalance remains between who we are as a nation and who represents us in Congress. The gender disparity is no different for physicians: more than one third of doctors in the U.S. are women, yet 100 percent of physicians in Congress are men. To date, there have only been two female physicians elected to Congress.
However, in the coming midterm election, there are six races with a chance at making history. It’s these battles which could make 2018 “The Year of the Female Physician.”
I remember being a first-time voter in 1992, labeled at the time “The Year of the Woman.” I was a sophomore at Michigan State University and turned 18 just three days before the election. Following the contentious Supreme Court hearings involving Clarence Thomas and Anita Hill, an unprecedented number of female candidates were vying for office that election year.
President George H. W. Bush was vilified for an appalling answer to the question of when his party might nominate a woman for President. “This is supposed to be the year of the women in the Senate,” he quipped. “Let’s see how they do. I hope a lot of them lose.” Frustrated about the state of gender inequality in politics, a little-known “mom in tennis shoes,” Patty Murray, decided to run for the U.S. Senate to represent Washington. She won, paving the way for an unprecedented number of women to enter national politics over the next 30 years. Still, very few of them have come with a background in medicine.
In the run-up up to this month’s mid-term elections, health care appears to be just one of many burning political issues that will be influencing Americans’ votes. But delve into nearly any issue—the economy, the environment, immigration, civil rights, gun control—and you’ll find circumstances and events influencing human health, often resulting in profound physical, emotional and financial distress.
Evidence suggests that separating immigrant children from their families could cause lasting emotional trauma. Gun violence and adverse weather events destroy lives and property, and create hazardous living conditions. Structural racism has been linked to health inequities, for instance where housing discrimination leads to segregation of black buyers and renters in neighborhoods with poor living conditions. The list goes on, and through every such experience, affected individuals, their loved ones, and their communities learn implicitly what health care providers have long known: that health status depends on much more than access to, or quality of, health care.
Some of the most influential factors are called social determinants of health, and they include education, immigration status, access to safe drinking water, and others. Society and industry must collaborate to address them if we are to reduce the extraordinary human and economic costs of poor health in our nation. Fortunately, many providers have embraced the challenge, and are tackling it in myriad, innovative ways. Continue reading…
We tested whether new payment mechanisms could be harnessed in health care delivery reform to reduce health and health care disparities. Here’s what we found.
First, there were facts that couldn’t be ignored:
#1: Children in rural Oregon on Medicaid suffered more health-related dental challenges compared to children with private insurance, including the pain, systemic health problems and disruptions to education that come with them. Advantage Dental, the state’s largest provider of Medicaid services, was determined to do something about it.
#2: New mothers on Medicaid in a New York City hospital were less likely to have a postpartum care visit compared to privately insured women. As a result, they missed assessments and screenings for a number of health conditions, some of which can lead to chronic health problems throughout their lives. For many women, the postpartum visit is one of the few chances to engage them in ongoing health care. The providers and care teams at the Icahn School of Medicine and the Mount Sinai Health System wanted to find out what it takes to increase postpartum visit rates.
#3: In Fairfax County, Virginia, multi-racial and multi-ethnic populations being served in three County-funded safety-net clinics were less likely to receive the typical high-quality care provided for hypertension, diabetes, and cervical cancer screening when compared to their Hispanic counterparts. The providers and teams at the Community Health Care Network stepped forward to address the issue. Continue reading…
Although signed into law in 2010, the Affordable Care Act has been in constant flux, with key aspects changing due to time-dependent provisions, Supreme Court decisions and shifts in U.S. policy. The effects of changes to the ACA on health insurance enrollment and premiums often depend on state regulatory decisions and other state-specific factors. The elimination of the individual mandate penalty is a prime example of this when applied to New York state, which has unusual rules in its individual insurance market.
In 2019, consumers will no longer face financial penalties stemming from the ACA’s individual mandate, which requires most people to secure health insurance. Without pressure from the individual mandate to enroll, younger and healthier people might drop coverage, leading to premium increases. New York’s health insurance regulations and expansive safety-net programs could make the state’s insurance market particularly susceptible to premium increases after the penalty’s elimination.
New York uses what is known as “full community rating” in its individual health insurance market, which means that all adult enrollees, regardless of age or whether they use tobacco, are charged the same premium. In most states, the youngest adults in the market pay one-third of what older adults do, and tobacco users are charged 1.5 times as much as non-users. New York’s flat premium structure raises costs for younger enrollees and nonsmokers, making them more likely drop coverage when the penalty goes away.
The original sin of health records interoperability was the loss of consent in HIPAA. In 2000, when HIPAA (Health Insurance Portability and Accountability Act) first became law, the Internet was hardly a thing in healthcare. The Nationwide Health Information Network (NHIN) was not a thing until 2004. 2009 brought us the HITECH Act and Meaningful Use and 2016 brought the 21st Century Cures Act with “information blocking” as clear evidence of bipartisan frustration. Cures, in 2018, begat TEFCA, the draft Trusted Exchange Framework and Common Agreement. The next update to the draft TEFCA is expected before 2019 which is also the year that Meaningful Use Stage 3 goes into effect.
Over nearly two decades of intense computing growth, the one thing that has remained constant in healthcare interoperability is a strategy built on keeping patient consent out of the solution space. The 2018 TEFCA draft is still designed around HIPAA and ongoing legislative activity in Washington seeks further erosion of patient consent through the elimination of the 42CFR Part 2 protections that currently apply to sensitive health data like behavioral health.
The futility of patient matching without consent parallels the futility of large-scale interoperability without consent. The lack of progress in patient matching was most recently chronicled by Pew through a survey and a Pew-funded RAND report. The Pew survey was extensive and the references cite the significant prior efforts including a 100-expert review by ONC in 2014 and the $1 million CHIME challenge in 2017 that was suspended – clear evidence of futility.