Tag: Brian Klepper

Posts by Brian Klepper

How a Value Focus Could Change Health Care

Aug 14, 2019

By BRIAN KLEPPER, PhD

How will the drive to health care value affect health care’s structure? We tend to assume that the health care structure we’re become accustomed to is the one we’ll always have, but that’s probably far from the truth. If we pull levers that incentivize the right care at the right time, it’s likely that many of the problems we think we’re stuck with, like overtreatment and a lack of accountability, will disappear.

A large part of getting the right results is making sure that health care vendors have the right incentives. All forms of reimbursement carry incentives, so it’s important to align them, to choose payment structures that work for patients and purchasers as well as providers. Fee-for-service sends exactly the wrong message, because it encourages unnecessary utilization, paying for each component service independent of whether its necessary and independent of the outcomes. Compare US treatment patterns to those in other industrialized nations and you’ll find ours are generally bloated with procedures that have become part of practice not because they’re clinically necessary but simply because they’re billable.

By contrast, value-based arrangements are really about purchasers demanding that health care vendors deliver better health outcomes and/or lower cost than what they’ve experienced under fee-for-service reimbursement, and the payment structure often asks the vendor to put his money where his mouth is, at least where performance claims are concerned. In a market that’s still overwhelmingly dominated by fee-for-service arrangements, one way for a vendor to get noticed is to financially guarantee performance. Integrated Musculoskeletal Care, a musculoskeletal management firm based in Florida, guarantees a 25% reduction in musculoskeletal spend on the patients they touch. This typically translates to a 4%-5% reduction in total health plan spend, just by contracting with this vendor, a compelling offer in an environment that makes it hard for upstarts to get market traction.

When Health Care Organizations Are Fundamentally Dishonest

Mar 19, 2019• 4

By BRIAN KLEPPER

A class action legal ruling this month, on a case originally filed in 2014, found that UnitedHealthCare’s (UHC) mental health subsidiary, United Behavioral Health (UBH), established internal policies that discriminated against patients with behavioral health or substance abuse conditions. While an appeal is expected, patients with legitimate claims were systematically denied coverage, and employer/union purchasers who had paid for coverage for their employees and their family members received diminished or no value for their investments.

Central to the plaintiff’s argument was the fact that UBH developed its own clinical guidelines and ignored generally accepted standards of care. In the 106 page ruling, Judge Joseph C. Spero of the US District Court in Northern California wrote, “In every version of the Guidelines in the class period, and at every level of care that is at issue in this case, there is an excessive emphasis on addressing acute symptoms and stabilizing crises while ignoring the effective treatment of members’ underlying conditions.” He concluded that the emphasis was “pervasive and result[ed] in a significantly narrower scope of coverage than is consistent with generally accepted standards of care.” Judge Spero found that UBH’s cost-cutting focus “tainted the process, causing UBH to make decisions about Guidelines based as much or more on its own bottom line as on the interests of the plan members, to whom it owes a fiduciary duty.”

In a statement to FierceHealthcare, UnitedHealth said it “looks forward to demonstrating in the next phase of this case how our members received appropriate care…We remain committed to providing our members with access to the right care for the treatment of mental health conditions and substance use disorders.”

It is important to be clear about what transpired here. Based on evidence, a subsidiary of UnitedHealthCare, America’s second-largest h ealth care firm, has been found in a court of law to have intentionally denied the coverage of thousands of patients filing claims. The organization justified the restrictions in coverage using internal guidelines tilted to favor financial performance rather than accepted standards of care. In other words, UBH’s leaders (as well as those at UHC) knowingly defrauded their customers and devised a mechanism to rationalize their scheme. In his ruling, Judge Spero described testimony by UHC representatives as “evasive — and even deceptive.”

Saying No to the Drug Crisis

Nov 27, 2018• 15

By BRIAN KLEPPER

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.

To Promote Health Care Excellence, Let’s Recognize Approaches That Assure Value

Aug 28, 2017• 3

BY BRIAN KLEPPER

A challenge for health care purchasers is choosing vendors whose performance matches their cost and outcomes claims. A 2015 Mercer survey found that only 41 percent of worksite clinic sponsors think that they’re saving money. As Al Lewis and Tom Emerick have detailed, many wellness and disease management companies simply overstate their results. In many cases employers may not realize that they, not the vendor, take the risk for results.

One important answer is the Care Innovations Validation Institute, founded by Intel, that offers health care vendors and purchasers objective validation of vendors’ claims. The Institute stands behind its work with a money-back guarantee. In the Wild West of the health care marketplace, the Validation Institute is an invaluable resource for purchasers, allowing them to confidently proceed with vendors, knowing that their promises have been vetted by scientists.

The Emergence of High-Performance Health Care

Apr 7, 2016• 3

By BRIAN KLEPPER

The health care mainstream is investing in a variety of mechanisms to beat back America’s health care cost and quality crisis – ACOs, medical homes, data analytics, practice transformation, technology and app integration, patient engagement and decision support – but few have borne fruit. Hidden in our system, though, are companies with unique and successful approaches. For example:

There are companies that, by collaboratively working on different parts of drug spend, consistently reduce pharmacy cost by 30-50 percent. This can result in savings of 6-12 percent of an organizational purchaser’s total health care spend, a huge amount!

Another company uses a physical therapy-based approach to manage musculoskeletal disorders, and can intervene in about 80 percent of cases. Its work with more than 30,000 patients, including in Fortune 100 firms, shows that it gets wildly better health outcomes – pain reduction, improvements in range of motion and activities of daily living – in half the recovery time and with more than a 35 percent reduction in the cost of conventional orthopedic care. Recidivism events that occur over the long term drop by 50 percent. They’re so confident of their approach that they’ll guarantee improved outcomes with a 25 percent reduction in cost.

Congress Has a Little Drug Problem

Mar 16, 2016• 15

By BRIAN KLEPPER

Screen Shot 2016-03-16 at 11.12.13 AM

The Congressional committee that recently demanded Martin Shkreli’s appearance must have hoped to spotlight a smug jerk responsible for the outrageous prescription drug pricing that we’re all up against. Of course there are lots of Shkrelis running drug companies, but most are shrewder and less brash, and might not make for such good theater.

Rep. Elijah Cummings (D-MD), one of the Committee’s questioners, seemed to think that his witness could move healthcare forward by disclosing the machinery of the drug sector’s excesses. “The way I see it, you could go down in history as the poster boy for greedy drug company executives or you could change the system. Yeah, you.”

Excessive treatment and cost are at the core of the entire U.S. healthcare crisis. The fact that other societies and a few innovative firms here consistently deliver equal or better quality care at dramatically lower cost betrays the idea that conventional U.S. healthcare is necessarily superior or even appropriate.

Every part of healthcare is guilty, but the pharmaceutical sector is a case in point. An open record of lobbying spending and what pharma has obtained from Congress makes clear that its contributions have worked to that sector’s economic advantage and against the interests of American patients and purchasers.

The Goose and The Elephant

Oct 10, 2015• 2

By BRIAN KLEPPER

America’s drug and biotech industries are no doubt alarmed by the national firestorm that erupted when Turing Pharmaceuticals raised the price 55 times of its 62 year old lifesaving drug, daraprim. They must worry that CEO Martin Shkreli’s tone-deaf reactions to the public’s scorn could precipitate close scrutiny of broader drug industry dynamics. The last thing pharma wants is a vigorous, in-depth national discussion of pricing, value, what we can afford and how other advanced countries handle drug spending. All this could kill the golden goose.

Seeking distance from the furor, PhRMA tweeted that “Turing Pharma does not represent the values of PhRMA’s member companies.” Then BIO, the biotech industry’s association, rescinded Turing’s membership and returned its dues, the equivalent of booting Turing out of the country club.

You can hardly blame them. In the US, pharma has engineered a great sweetheart deal. Once a drug is FDA-approved, the law dictates that Medicare must pay whatever a manufacturer demands, without negotiating, and that pricing sets a reference for the rest of American drug prices. Peter Bach, MD, who leads Memorial Sloan Kettering’s Center for Health Policy and Outcomes, summed up our dilemma earlier this year:

[Drug] companies are taking advantage of a mix of laws that force insurers to include essentially all expensive drugs in their policies, and a philosophy that demands that every new health care product be available to everyone, no matter how little it helps or how much it costs. Anything else and we’re talking death panels.Continue reading…

Behind the Curtain: Wendell Potter on the Industry’s Management of Care and Reform

Jul 10, 2009• 11

By BRIAN KLEPPER

Stop what you're doing and take out a half-hour to watch this week's superb Bill Moyers' 3-part show, especially the extended interview with Wendell Potter, former CIGNA VP Corporate Communications, for a frank, insider's discussion of how major health plans have worked over the last decade.

Also be sure to watch Moyer's very brief final commentary, describing a dinner that was planned by the Washington Post to connect lobbyists with high-ranking officials working on the health care reform process. His conclusion: we won't get anywhere with health care or any other national problem until "the money-lenders are tossed out of the temple and we tear down the sign they've placed on government, the one that reads 'For Sale.'"

From Health 2.0 meets Ix: A Breathtaking Display of Possibilities

Apr 2, 2009• 5

<p class="byline"By BRIAN KLEPPER

(Boston) Jane Sarasohn-Kahn and I were quickly comparing notes this morning. Our impression is that, compared to past meetings, this one seems more characterized by doers than observers.

This conference brings together a dizzying array of tools and experiences, which is testament to the organizers’ encyclopedic handle on the vast diversity of activity in this sector. Josh Seidman, Indu Subaiya and Matthew Holt have done yeomans’ jobs in putting these impressive presentations together.

Mingling, I’ve spoken to person after person actively involved in mostly consumer-oriented ventures, leveraging science and user-generated information to facilitate a more favorable patient experience. There are some real steps forward, like the demo that Mayo and Microsoft showed, that takes information entered into Health Vault and applies the rules that Mayo has developed through many years of experience. Or the work that groups like Up-To-Date and HealthWise are doing, that continually, organically update descriptive information throughout medicine and health care.

Check Out The TED Talks

Feb 11, 2009

By Brian Klepper

The uber-fabulous (and expensive) TED conference – 4 days, $6,000 and sold out a year in advance – a collection of some of the world's most thoughtful, innovative and high achieving individuals, has just finished, and many of the talks are free to watch. They cover a breathtaking array of topics.

Take 20 minutes each morning and get your mind into gear with one if these. I just watched Bill Gates' excellent presentation about the issues associated with tackling malaria and with creating great teachers.