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Category: The Business of Health Care

13 Year Old McAllen

BY IAN MORRISON

As a Scot, obviously I am a whisky fan, and although I prefer the smoky malts of Islay (where my grandfather was from and where I visit my friends there frequently), I am also a huge fan of McCallan 18-year-old whisky, the sticky toffee pudding of single malts.

But as all policy wonks know, McAllen Texas is not famous for whisky but for Atul Gawande’s “Cost Conundrum” article in the New Yorker, in 2009 which is still required reading in medical school and MPH classes and was arguably the cornerstone of Obama health policy and the ACO movement.

Dr. Atul Gawande described overutilization and high cost of Medicare revealed by Dartmouth Atlas nationally and zeroed in on McAllen Texas.  Compared to El Paso (a seemingly like comparison) McAllen was the most expensive place in America for healthcare based on Medicare claims data.  Gawande highlighted the entrepreneurial, doctor-owned, Doctor Hospital at Renaissance DHR in Edinburg, TX as having fancy, modern technology while the community as a whole seemed underserved.  

I have always had unease with just using Medicare data to judge costs, because there was no recognition of what I was observing on my travels, namely an enormous variation in commercial prices (not simply utilization) in hospital costs in terms of paid claims by self insured employers.  Poignantly, sources at the time claimed McAllen, Texas had among the lowest commercial insurance premium places in the country.  Interesting.

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MedEd in an AI Era

BY KIM BELLARD

I’ve been thinking a lot about medical education lately, for two unrelated reasons.  The first is the kerfuffle between US News and World Report and some of the nation’s top – or, at least, best known – medical schools over the USN&WR medical school rankings.  The second is an announcement by the University of Texas at Austin that it is planning to offer an online Masters program in Artificial Intelligence.

As the old mathematician joke goes, the connection is obvious, right?  OK, it may need a little explaining.

USN&WR has made an industry out of its rankings, including for colleges, hospitals, business schools, and, of course, medical schools. The rankings have never been without controversy, as the organizations being ranked don’t always agree with the methodology, and some worry that their competitors may fudge the data.   Last year it was law schools protesting; this year it is medical schools.

Harvard Medical School started the most recent push against the medical school rankings, based on:

…the principled belief that rankings cannot meaningfully reflect the high aspirations for educational excellence, graduate preparedness, and compassionate and equitable patient care that we strive to foster in our medical education programs…Ultimately, the suitability of any particular medical school for any given student is too complex, nuanced, and individualized to be served by a rigid ranked list, no matter the methodology.

Several other leading medical schools have now also announced their withdrawals, including Columbia, Mt. Sinai, Stanford, and the University of Pennsylvania.  

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Matthew’s health care tidbits: How do you tell the price of a drug?

Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

As the average THCB reader is probably all too well aware I live in Marin County, California and therefore my kids are on amphetamine-based medication for ADHD. This is annoying as all get out because, as a controlled substance, this medication needs to be re-prescribed every month (no automatic refills allowed). In addition no 90 day supplies are allowed, and the kids must have checkups with their prescribing physician every 3 months (which are not cheap).

It’s not just prescribing which is complicated. Supply is an issue too and frequently pharmacies run out. This is furtherly frustrating because if one pharmacy is out it can’t move the Rx to another, even in the same chain like Walgreens or CVS. The new pharmacy requires a whole new prescription. I discovered last year that Alto Pharmacy, a VC backed home delivery pharmacy, will deliver controlled medications. This has saved me 12-24 visits to CVS in the past year.

But with a new year there are new problems. The “allowed” price, i.e. the price my insurer Blue Cross of Massachusetts had agreed with Alto Pharmacy (and other pharmacies) for the specific generic for one of my kids somehow went from $29 a month to $107. That’s the amount I actually pay until we hit our $4,500 family deductible. Incidentally because it’s a medication we still pay $10 a month after we hit the deductible.

Alto kept telling me that the cash price was around $50. But of course if we pay the lower cash price (either there or elsewhere using GoodRx) that doesn’t count against the deductible. So if we hit the deductible we are out the $50 (which works out to roughly $1200 per year for 2 kids). I kept asking Alto what had changed that made the cost go up? They kept not telling me an answer, other than it cost $107. I asked the good people at Health Tech Nerds slack group if they could guess what was going on. Their consensus was that the formulary tier had been changed. “But it’s a generic”, (I foolishly thought).

Finally I called the pharmacy number on BCBS Massachusetts website, and ended up talking to someone at CVS Caremark– their PBM. In the course of the 30 minute call they ran a dummy claim with several other pharmacies. All came back at the $107 number. They then looked up the formulary to see if it had changed. Meanwhile I looked at the formulary on the BCBS Mass website while this was going on. The medication was still tier 1. So why has the cost to me and perhaps to the Blues plan gone up from $29 a month to $107? (Yes that’s more than a factor of 3!)

While she was talking to me the Caremark rep was also able to Slack with several other colleagues–relatively advanced for an old world PBM I thought. Eventually the answer came back. The med was indeed tier one. But until we spent our deductible the med was tier 2. In other words if we were paying for the drug the price is $107. As soon as BCBS Massachusetts starts paying for it the price goes back to $29 (of which they only pay $19) as we have a $10 copay.

Why this has happened is beyond me? Is Caremark or BCBS Massachusetts suggesting another cheaper drug? I haven’t heard from them. Are they trying to discourage patients from getting to their deductibles? My cynical conclusion is that Caremark is trying to increase the revenue for CVS– its corporate pharmacy–which that accounts for 1/3 of all outpatient Rx.

Otherwise this pricing strategy makes no sense to me. Of course this is just another example of a completely opaque process. And that appears typical for American health care.

Matthew’s health care tidbits: My retina & what it tells us about primary care

Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

I had a little scare the other night. I was driving home from a weekend in the mountains and I asked my wife if she saw that flashing light. No it wasn’t the cops, and no she hadn’t seen it. Turns out that I had a bright flash if I moved my eye a certain way. Oh, well I assumed I was tired and a good night’s sleep would fix it.

Next morning the flash was still there when I looked quickly to the left and a few weird floaters had appeared. I headed to the Mayo Clinic website and it looked to me like I had a detaching retina. I got on the urgent visit video with One Medical. The NP who answered said it sounded like I might have retina problems and I should get it checked by my ophthalmologist. But my eyesight has always been great (other than me needing reading glasses in my old age) and I haven’t got one. So who, I asked, do you recommend?

Here we fall into the crux of the problem. One Medical is an excellent primary care service. So good that Amazon bought it for $3bn. But it’s not a multi-specialty group nor is it a system like Kaiser. The answer was, “we don’t really recommend anyone–that’s not how it works.” The NP ended up looking up ophthalmologists near me & sent me a name as a referral in their app. But that’s not a link to anything and it wasn’t one chosen through some analytical process of seeking quality excellence.

I looked up MarinHealth (my local hospital)’s website and searched ophthalmology. That referred name was on it. I called. The doctor was out this week. They gave me another name. That doctor’s office gave me another name and that third office could see me that same day. I felt some pressure to see them right away as in the case of a detached retina Mayo says “ Contacting an eye specialist (ophthalmologist) right away can help save your vision”. The good news is having spent a couple of hours at the ophthalmologist’s my retina needs watchful waiting not surgery.

But the bad news is that for me, like 90% of Americans, there’s no easy way to get referred into a trustworthy system for specialty care. This can be even worse. My friend Sarah McDonald explains in her book The Cancer Channel how, after being diagnosed with a rare incurable cancer by a head & neck surgeon, the all encompassing support she received was to be given the number of a specialist at UCSF who couldn’t even talk to her for 3 weeks.

Mike Magee talks about the role of the health care system being to reduce patients’ “fear and worry”. Our lack of a specialty care referral system, especially when potentially serious and urgent care is on the line, is a big reason why there is so much fear and worry. I wish I had a concierge advocacy system like Included Health or Transcarent which could get me to the right place and work with me through the experience. But like most Americans at the time I need reassurance the most I’m calling a list of phone numbers hoping someone can see me.

We have primary care, we have specialty care. But we don’t have a system that cares.

My family’s disastrous experience with a growth-driven long-term care company

by “E-PATIENT” DAVE DEBRONKART

Continuing THCB’s occasional series on actual experiences with the health care system. This is the secondin a short series about a patient and family experience from one of America’s leading ePatients.

I’ve been blogging recently about what happens in American healthcare when predatory investor-driven companies start moving into care industries because of, as Pro Publica puts it, “easy money and a lack of regulation.”  The first two posts were about recent articles in The New Yorker on companies that are more interested in sales and growth than caring.

My mother died in October. What we haven’t disclosed until now is that it happened in horror story #3: she passed after a single week of “respite care” provided by the local outlet of a growing chain of assisted living facilities.

Our mom, a 93 year old cardiac patient, had been in the hospital for ten days, and was discharged to go “home with assistance” because she was steadily improving. The respite facility’s director, an RN, evaluated Mom in the hospital, declared her appropriate for their respite care service, and took payment in full (in advance) for two weeks.

Mom’s primary caregivers were, as usual, the family’s daughters (my sisters), who had been with her throughout the hospitalization (and for countless hours every year). Mom and they discussed the discharge plans at length. Believing that a good respite care facility was an excellent bridge for continued progress between hospital and returning home, they purchased a two week stay after discharge. An important part of the decision was the website’s promise of “Strengthening during physical therapy.”

We soon found out that the facilities and understaffing were so precarious and stress-inducing, and so many things went wrong, that we didn’t dare leave her alone. To the contrary, after just one week, our mom said she was so stressed that she wanted to get out of there, and two days later she passed away.

Mom loved to sit in this gazebo, along a tributary of the Chesapeake. Photo by my sister.

Our complaint letter and management’s response

Much has been written in healthcare and other industries about how to document and report a service problem and how management should respond.

My sisters carefully composed a detailed seven page letter to management, listing everything that went wrong, from a wrong-height toilet seat, to a shower chair with missing handrail (perfect for assisted living, not!), to the Bluetooth room key that kept failing, to staff that couldn’t recognize the on/off switch on her oxygen, to stress-inducing fire alarms with nobody coming to help. That’s only a few items; their entire letter was published yesterday on The Health Care Blog (thank you THCB!).

And the facility’s response? After walking through the whole letter with my sisters on a call, their emailed bottom line was, verbatim:

“The services listed for respite program were available to your mother.”

Well, their marketing people need to talk to their facility managers.

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One family’s disastrous experience with a growth-driven long-term care company

by “E-PATIENT” DAVE DEBRONKART

Continuing THCB’s occasional series on actual experiences with the health care system. This is the first in a short series about a patient and family experience from one of America’s leading ePatients.

I’ve been blogging recently about what happens in American healthcare when predatory investor-driven companies start moving into care industries because the money’s good and enforcement is lax. The first two posts were about recent articles in The New Yorker on companies that are more interested in sales and growth than caring. I now have permission to share the details of one family’s disastrous encounter with such a company’s “respite care” service.

The National Institute of Health says respite care “provides short term relief for primary caregivers.” It’s not medical care or memory care or assisted living; it’s not paid for by health insurance and it’s not regulated by the Federal government. It just replaces, for a while, the ordinary duties provided by family caregivers, so they can get a break.

The family’s mother was discharged from hospital to home. The primary caregivers were, as usual, the family’s daughters, who had been with their mother throughout the hospitalization. Believing that a good respite care facility was an excellent bridge for continued progress between hospital and returning home, they purchased a two week stay before taking their mother home.

It did not go well: ten days later their mother was dead.

The memorial tree planted by the family at their mother’s favorite park. Photo by Sarah.

The company’s website and lobby are gorgeous, of course. The reality was not. Media coverage talks about management’s desire to climb the rankings of biggest companies in the industry, as they acquire some facilities and build new ones. I believe the public needs to be alerted to such companies, in which management’s attention and achievements are much more on further growth than on delivering what they’ve already sold.

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Netflix for Drugs?

By KIM BELLARD

A relative — obviously overestimating my healthcare expertise — asked my thoughts on The New York Times article Can a Federally Funded ‘Netflix Model’ Fix the Broken Market for Antibiotics? I had previously skimmed the article and was vaguely aware of the Pasteur Act that it discusses, but, honestly, my immediate reaction to the article was, gosh, that may not be a great analogy: do people realize what a tough year Netflix has had?

I have to admit that I tend to stay away from writing about Big Pharma and prescription drugs, mainly because, in a US healthcare system that seems to pride itself on being opaque, frustrating, and yet outrageously expensive, the prescription drug industry takes the cake. It’s too much of a mess.

But a “Netflix model” for drug development? Consider me intrigued.

It’s easy to understand why market forces might not do well with rare diseases that need an “orphan drug,” but the “subscription model” approach that the Pasteur Act seeks to address is something that most of us need: antibiotics. Antibiotic resistance has made many of our front-line antibiotics less effective, but discovering new antibiotics is a slow, expensive process, and many pharmaceutical companies are reluctant to take the risk. The Pasteur Act would essentially pay for their development in return for “free” use of subsequently invented drugs.

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Sylvana Sinha, CEO, Praava Health

Sylvana Sinha is CEO of Praava Health, a primary & specialty care network based in Dhaka, Bangladesh. While the average American may only think about Bangladesh when there’s some disaster on the news it’s a country of 165m+ people with a GDP per capita exceeding India’s. It lacks excellent health services for its growing middle class, and that’s the gap Praava Health is filling. I learned a lot about Sylvana, Bangladesh, and Praava in this quick interview —Matthew Holt

Health Care Execs Behaving Badly

BY KIM BELLARD

In the midst of a pandemic during which health care workers proved themselves to be very bit the heroes we like to think of them as being, it’s sobering to be reminded that the system they work in is filled with perverse incentives that work against patients’ best interests.  Four pieces of excellent journalism – two from The New York Times, and two from Kaiser Health News — this week brought that front and center.  

If you haven’t read them yet, I urge you to do so, but, while you might enjoy the writing, don’t expect to enjoy their content.

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Quickbite Interviews: IXLayer

I was at the AHIP conference in Vegas late last month and caught up with a number of CEOs & execs for some quick bite interviews — around 5 mins getting (I hope) to the gist of what they & their companies are up to. I am going to dribble them out this week–Matthew Holt

First up is Pouria Sanae, CEO of IXLayer.