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Category: The Business of Health Care

A Plan to Conquer U.S. Drug Shortages

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By JESSICA DALEY and WAYNE RUSSELL

COVID-19 has focused the nation’s attention on the risks associated with complex, global supply chains, particularly related to healthcare products and prescription drugs. While supply disruptions of personal protective equipment (PPE) captured headlines, the pandemic also compromised the drug supply chain. With much of the United States’ generic drugs manufactured overseas, exportation bans coupled with increased global demand created significant challenges for U.S.-based providers to secure basic, life-sustaining and life-saving therapies.

As an “easy” solution, many are now calling for manufacturers to produce medications domestically. While expanding investment in U.S. drug-making capacity is a vital component of a reliable supply strategy, moving the majority of production onshore is unrealistic.

Creating a dependable drug supply chain is a multi-faceted issue that requires a thoughtful, diversified strategy.

Repairing the Market is Job #1

Drug shortages have been pervasive for more than a decade – well before COVID-19’s onset. While shortages are triggered in a number of ways, arecent Food and Drug Administration (FDA) report says economics are a main causative factor.

Almost all shortage drugs are older, low-cost generics costing less than $9/dose. Because these products don’t generate blockbuster profits, manufacturers are less willing to invest capital to improve quality, build redundant capacity or source safety stock. Over time, market competition continues to erode price and further compress profits, leading to a war of attrition where competitive players exit the market – leaving behind as few asone or two manufacturers in many important categories.

Relocating production to the United States will not address generic drugs’ inherent profitability problem. Increased regulations, environmental and otherwise, could lead to higher production costs, which begs the question: will healthcare providers trade the potential for higher costs for predictability in supply?

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Redefining Values in American Health Care

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By RICHARD HOEHN, MD

Experts claim we could have been better prepared when the COVID-19 pandemic struck in early 2020. With an annual budget of $400-700 million, the Strategic National Stockpile (SNS) is designed to respond to chemical, biological, and other disasters. Its $8 billion inventory included 13,000 ventilators and a limited supply of personal protective equipment, N95 masks, and medical supplies. This left state and local governments scrambling as the COVID-19 pandemic accelerated and the capacity of many hospitals was overwhelmed.

Faced with immediate and visible death and suffering, leaders took drastic steps to contain the virus, “flatten the curve,” and mitigate economic consequences. Trillions of dollars were allocated to recovery and stimulus packages.

This scenario mirrors our general approach to health care: chronic underfunding of public health followed by high costs and loss of life.

While not as shocking as a sudden pandemic, millions of Americans struggle daily with medical and socioeconomic challenges. Our health care system is designed to care for these patients when they have a problem, not to keep them well. This creates a dichotomy where a minority of the population spends most of the health care dollars and little is invested in the remaining majority

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The Medical-Industrial Complex Pads Its Pockets As We Empty Ours

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By MIKE MAGEE, MD

A report this month published in the British Medical Journal found that 80% of 293 physician leaders and board members of 10 of the most influential medical associations in the United States (including the American College of Physicians, American College of Cardiology, American Psychiatric Association, Infectious Disease Society of America, American College of Rheumatology, the American Society of Clinical Oncology, Endocrine Society, American Thoracic Society, and Orthopaedic Trauma Association) received financial payments of $130 million in total for “leadership” activities between 2017 and 2019.

In doing so, they were replicating the behavior established in 1939 by Vannevar Bush. Born March 11, 1890, in Everett, Massachusetts, the only son of a Universalist preacher and the grandson of a whaler, Bush earned a math degree from Tufts, followed by a PhD in engineering from MIT. From the beginning of his career he straddled the academic and the industrial in a way that anticipated the future of almost all scientific research.

In 1939, with the Second World War consuming both Europe and Asia, the father of the Medical-Industrial Complex met with the president of Harvard University and the president of Bell Labs, and mapped out a strategy for overcoming our lack of scientific preparedness. Out of that small meeting came a short, four-paragraph proposal for a centralized science operation—outside the control of the military—which he presented to President Roosevelt on June 12, 1940.

The president read the report, seized his pen, and scratched at the top, “OK-FDR.” With that stroke, the National Defense Research Committee (NDRC) was created, and with it, the fully codified and institutionalized era of academic-industrial partnerships in research.

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Lasting Lessons From Health Care’s ‘Money Back Guarantee’ Experiment

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Ceci Connolly
Matt DoBias

By CECI CONNOLLY and MATT DOBIAS

When it comes to money back guarantees in health care, it’s often less about the money and more about the guarantee.

That’s the biggest takeaway shared by two organizations—Geisinger Health System and Group Health Cooperative of South Central Wisconsin (GHCSCW)—that separately rolled out closely-watched campaigns to refund patients their out-of-pocket costs for health care experiences that fell short of expectations.

Both programs started as a way to inject a basic level of consumerism into a process long bereft of one. In fact, as consumer frustration over medical costs rise, a money back guarantee has the potential to win back a dissatisfied public.

But like many experiments in health care, the effort produced some unexpected results as well. Instead of a rush on refunds, executives from both systems said their money-back pledge served even better as a continuous-improvement tool, with patients providing almost instantaneous feedback to staff who felt newly empowered to address problems.

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A Dream Deferred? Price Transparency in the American Healthcare System

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By JOANNE RODRIGUES-CRAIG

Financial well-being, or the state of an individual’s personal monetary affairs, is one of the six core indicators of wellness in the Gallup-Healthways Well-Being Index. Poor financial well-being can lead to a whole host of short and long term mental and physical health issues, including depression, anxiety, troubled relationships and chronic stress.[1] [2]

It is surprising how American hospitals and other health providers have neglected financial well-being when considering their patients’ health. In a recent study by the American Cancer Association, 56% of Americans suffer from hardships related to the cost of care.[3] Medical costs are the primary cause of 67% of all bankruptcies in the United States.[4] To think that health care costs are not having a deleterious effect on American’s general well-being is a complete fallacy.

Even as a former health technology data scientist, I was largely in the dark about how health provider pricing works. Finding health provider pricing is like pulling teeth; it’s extremely time0consuming, frustrating (and sometimes painful) to get a health estimate for even the simplest procedures. Having poor or inadequate insurance can feel like a weight holding you down during your most vulnerable time, in the midst of a major health crisis.

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Immediate Changes Needed for Physicians to Stay in Business During the Pandemic

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Practices cannot survive the COVID-19 cash flow crisis

By JEFF LIVINGSTON, MD

Will doctors be able to keep their practices open during the worst pandemic in our lifetime? Our country needs every available doctor in the country to fight the challenges of Covid-19. Doctors working in independent practices face an immediate cash flow crisis threatening their ability to continue services.

The CARES Act was signed into law on Friday, March 27, 2020. The law offers much-needed help to the acute needs of hospitals and the medical supply chain. This aid will facilitate the production of critical supplies such as ventilators and PPE. The law failed to consider the needs of the doctors who will run the ventilators and wear the masks.

Cash flow crisis

Private-practice physician groups experienced an unprecedented reduction in in-office visits as they moved to provide a safe and secure environment for patients and staff. In compliance with CDC guidelines, practices suspended preventative care, nonurgent visits, nonemergent surgery, and office procedures.

These necessary practice changes help keep patients safe and slow the spread of Covid-19. The unintended consequence is an unreported and unrecognized cash flow crisis threatening the viability of physician practices.

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A Full-Scale Assault on Medical Debt, Part 3

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By BOB HERTZ

The only way to fully eliminate medical debt would be a comprehensive single payer plan, which allowed no fees at the point of service.

However, such a plan would require setting all prices for all doctors, hospitals, labs, and drug companies. All providers would have to be satisfied – in advance — with what the government is going to pay them on each procedure.

Countries like Germany accomplish this through collective bargaining. Japan, France, Taiwan, Israel and Scandinavia also have national fee schedules. However, I do not think you could get all the providers in Toledo to agree on one schedule, much less every provider group in America. 

Single payer would also require new income and payroll taxes of at least ten per cent more than we pay now, if we want first-dollar coverage.

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A Full-Scale Assault on Medical Debt, Part 2

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By BOB HERTZ

The first section of this article stated that many forms of medical debt can be reduced or cancelled by stronger enforcement of consumer protection laws. These debts are not inevitable and are not due to poverty. It would not require trillions of federal dollars to cancel them, either – just the willingness to go against lobbyists.

Therefore I advocate the following attacks on medical debt:

Phase One

We must cancel balance bills and surprise bills if there was no prior disclosure.

In most cases, providers will not have the right to collect anything more than what the  insurers pay them.

Phase Two

We must cancel the older, inactive “zombie debts” that are being purchased by collection agencies.

This line of business must terminate. Providers throughout the country are selling uncollected medical debt for pennies on the dollar to collection agencies, who aggressively attempt to force patients to pay the full amount due. These debt collectors harass patients at work and at home, deploying unscrupulous tactics even after the statute of limitations on the debt has expired. 

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A Full-Scale Assault on Medical Debt, Part 1

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By BOB HERTZ

The recent proposal by Sen. Bernie Sanders to cancel $81 billion of medical debt is a very good start—but it is only a start.

The RIP Medical Debt group—which buys old medical debts, and then forgives them—is absolutely in the right spirit. Its founders Craig Antico and Jerry Ashton deserve great credit for keeping the issue of forgiveness alive.

Unfortunately, over $88 billion in new medical debt is created each year; most of it still held by providers, or sold to collectors, or embedded in credit card balances.

Tragically, none of this has to happen! In France, a visit to the doctor typically costs the equivalent of $1.12. A night in a German hospital costs a patient roughly $11. German co-pays for the year in total cannot exceed 2% of income. Even in Switzerland, the average deductible is $300.

U.S. patients face cost-sharing that would never be tolerated in Germany, says Dr. Markus Frick, a senior official. “If any German politician proposed high deductibles, he or she would be run out of town.”

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Hotspotting, Superutilizers, and Avoiding “RTM Traps”

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Thomas Wilson
Vince Kuraitis

By THOMAS WILSON PhD, DrPH and VINCE KURAITIS JD, MBA

A recent study in the New England Journal of Medicine reported on the results of a “hotspotting” program created by the Camden Coalition of Healthcare Providers (Camden Coalition). Hotspotting targets interventions at all or a subset of healthcare superutilizers – the 5% of patients that account for 50% of annual healthcare spending.

The results of the study were disappointing. While utilization (hospital readmissions) declined for the hotspotting group, the declines were almost identical in the control group.  At least three headlines implied that the conclusion of the study was that hotspotting care management approaches have been proven not to work:

“’Hot spotting’ doesn’t work. So what does?” Politico Pulse

“Reduce Health Costs By Nurturing The Sickest? A Much-Touted Idea Disappoints.” NPR

“Hotspotting” Apparently Doesn’t Reduce Superutilizers’ Readmissions” NEJM Journal Watch

NOT SO FAST!

As we’ll explain, we believe that much of what’s going on here can be explained by one or both of what we call “RTM Traps” (regression to the mean traps).

In this essay, we will:

  • Define RTM (regression to the mean)
  • Explain the RTM Traps and how many have fallen into the traps
  • Suggest how to avoid the RTM Traps

We believe our POV is relevant to clinical, technical, and executive staff in the many organizations focusing on the superutilizer population – hospitals, physicians, ACOs, health plans, community groups, etc.

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