Tag: Costs

Case Study: What Should the Health Plan Executive Do?

Mar 15, 2013• 7

By David Shaywitz, MD

Here’s a hypothetical question Roger Longman posed to a panel at the recent Real Endpoints Symposium that is probably worth a little thought from everyone; since the issues raised are intended to be general, I’ve modified this scenario slightly to try to make it as non-specific as possible, so it explicitly doesn’t (and isn’t intended to) apply to a particular disease state or to particular drugs.

Here’s his hypothetical:

Let’s say you are the CMO of a not-for-profit health plan, and are considering costs and reimbursement approaches associated with therapies for a disease that could be treated with Drug A or Drug B. The disease doesn’t cause any symptoms, but if untreated, serious organ damage could occur after many years. Drug A offers a 95% cure rate. Drug B offers a 88% cure rate. The manufacturer of drug B offers a very good economic deal to the payor, saying “If you place our drug first, we’ll offer you excellent pricing and also pay for patients who are failed by our drug to receive drug A.” What would you do?

Can Health Care Transparency Make A Difference?

Mar 9, 2013• 34

By Martin S. Gaynor

There’s been a lot of discussion of transparency in health care recently, e.g., a USA Today op-ed and a counterpoint by Paul Ginsburg. The appeal of transparency is obvious. As movingly documented by Steven Brill in Time, prices are high and often differ quite substantially, even across close by providers. However, we don’t know the prices for the health care that we consume, and it’s extremely difficult to find out what these things cost (e.g., this recent study in JAMA).

While the appeal of transparency is obvious, it’s important to realize that buying health care is not like buying milk at the grocery store. A key factor is health insurance. Health insurance is very important — people need to be insured against the catastrophic expenses that can occur with serious illness. Thus people with high health care expenses won’t be exposed to most of those expenses (and shouldn’t) and therefore will have no reason to respond to information about health care prices.

The Republican Case For Waste In Health Care

Mar 8, 2013• 25

By Phillip Longman

Conservatives love to apply “cost-benefit analysis” to government programs—except in health care. In fact, working with drug companies and warning of “death panels,” they slipped language into Obamacare banning cost-effectiveness research. Here’s how that happened, and why it can’t stand.

Why are you reading this when you could be doing jumping jacks?

And how come you’ve gone on to read this sentence when you could be having a colonoscopy?

You and I could be doing all sorts of things right now that we have reason to believe would improve our health and life expectancy. We could be working out at the gym, or waiting in a doctor’s office to have our bodies scanned and probed for tumors and polyps. We could be using this time to eat a steaming plate of broccoli, or attending a support group to help us overcome some unhealthy habit.

Yet you are not doing those things right now, and the chances are very strong that I am not either. Why not?

CommonWell Is a Shame and a Missed Opportunity

Mar 6, 2013• 39

By Adrian Gropper, MD

The big news at HIMSS13 was the unveiling of CommonWell (Cerner, McKesson, Allscripts, athenahealth, Greenway and RelayHealth) to “get the ball rolling” on data exchange across disparate technologies. The shame is that another program with opaque governance by the largest incumbents in health IT is being passed off as progress. The missed opportunity is to answer the call for patient engagement and the frustrations of physicians with EHRs and reverse the institutional control over the physician-patient relationship. Physicians take an oath to put their patient’s interest above all others while in reality we are manipulated to participate in massive amounts of unwarranted care.

There’s a link between healthcare costs and health IT. The past months have seen frustration with this manipulation by industry hit the public media like never before. Early this year, National Coordinator for Health Information Technology Farzad Mostashari, MD, called for “moral and right” action on the part of some EHR vendors, particularly when it comes to data lock-in and pricing transparency. On February 19, a front page article in the New York Times exposed the tactics of some of the founding members of CommonWell in grabbing much of the $19 Billion of health IT incentives while consolidating the industry and locking out startups and innovators. That same week, Time magazine’s cover story is a special report on health care costs and analyzes how the US wastes $750 Billion a year and what that means to patients. To round things out, the March issue of Health Affairs, published a survey showing that “the average physician would lose $43,743 over five years” as a result of EHR adoption while the financial benefits go to the vendors and the larger institutions.

Really Big New Thing

Mar 6, 2013• 2

By MIKE MIESEN

“Will Accountable Care Organizations (ACOs) work?”

That question has been thrown around for years, serving as fodder for Twitter-fights, myriad health care blog posts, and hours of beer-soaked barroom debates (if you’re shameless as I am). Adding to the discussion are Clayton Christensen, Jeffrey Flier, and Vineeta Vijayaraghavan (or CFV, as I’ll refer to them), of Harvard Business School, Harvard Medical School, and Innosight fame, respectively.

In a recent Wall Street Journal article, they answer the question with a resounding “No.” But, in doing so, they treat ACOs and other health care delivery mechanisms – part of what I’ll call the “New New Thing in Health Care” – as mutually exclusive. Contra CFV, ACOs may help spur the exact disruptive innovation in health care that Christensen is known for discussing.

Obamacare In Pictures

Mar 2, 2013• 20

By J.D. KLEINKE

A seasoned colleague recently told me that some PowerPoint presentations have no power and make no point.

But sometimes, a picture really is worth a thousand words. Or maybe — in the case of any meaningful discussion of health reform, thanks to its density and complexity — it might be worth 10,000 words. Hence our handy little exhibit.

This picture captures the 10,000 words it would require to explain with technical precision where President Obama’s Affordable Care Act fits relative to all health reform plans. It places “ObamaCare” along an ideologically scaled continuum of all serious reform options developed, debated and discarded or ignored since the 1980s.

They are all here: from the single-payer, centrally controlled models popular with those who detest corporations and the influence of money in medicine — two actual, not imagined “government takeovers of health care” — to two free market, laissez-faire models favored by those who detest regulation and the heavy hand of government in medicine.

Are Price Controls the Answer?

Feb 27, 2013• 51

By Martin S. Gaynor

A recent article in Time magazine by Steven Brill, “Bitter Pill: Why Medical Bills Are Killing Us,” is a brilliantly written expose of the excesses and outrages of health care pricing. In reaction to the story, some have suggested the price controls are the appropriate (or the only) way to rectify the situation. A recent story in the Washington Post’s Wonkblog, “Steven Brill’s 26,000-word health-care story, in one sentence,” suggests that US health care costs and cost growth are so high because we do not use rate setting, i.e., price controls.

In fact, I think it’s not easy to establish whether that is indeed the case. We don’t get to use randomized controlled trials for health policies or systems, so it’s difficult to figure out how effective a policy like rate setting is. Let me start with some simple examinations of patterns in data to see if something jumps out that strongly supports (or contradicts) the assertion that price controls reduce health care costs.

Data Mining Systems Improve Cost and Quality of Healthcare – Or Do They?

Feb 24, 2013• 3

By William Hersh, MD

Several email lists I am on were abuzz last week about the publication of a paper that was described in a press release from Indiana University to demonstrate that “machine learning — the same computer science discipline that helped create voice recognition systems, self-driving cars and credit card fraud detection systems — can drastically improve both the cost and quality of health care in the United States.” The press release referred to a study published by an Indiana faculty member in the journal, Artificial Intelligence in Medicine [1].

While I am a proponent of computer applications that aim to improve the quality and cost of healthcare, I also believe we must be careful about the claims being made for them, especially those derived from results from scientific research.

After reading and analyzing the paper, I am skeptical of the claims made not only by the press release but also by the authors themselves. My concern is less about their research methods, although I have some serious qualms about them I will describe below, but more so with the press release that was issued by their university public relations office. Furthermore, as always seems to happen when technology is hyped, the press release was picked up and echoed across the Internet, followed by the inevitable conflation of its findings. Sure enough, one high-profile blogger wrote, “physicians who used an AI framework to make patient care decisions had patient outcomes that were 50 percent better than physicians who did not use AI.” It is clear from the paper that physicians did not actually use such a framework, which was only applied retrospectively to clinical data.

What exactly did the study show? Basically, the researchers obtained a small data set for one clinical condition in one institution’s electronic health record and applied some complex data mining techniques to show that lower cost and better outcomes could be achieved by following the options suggested by the machine learning algorithm instead of what the clinicians actually did. The claim, therefore, is that if the data mining were followed by the clinicians instead of their own decision-making, then better and cheaper care would ensue.

How Much are Misaligned Incentives in Health Care Costing Tax Payers?

Feb 23, 2013• 28

By Elizabeth Dzeng, MD

On Christmas Eve, I took care of a patient who had just undergone surgery for an infected artificial shoulder. He was to be discharged on intravenous antibiotics three times a day for six weeks. This is a pretty common treatment. Patients are generally able to give themselves this medication with the help of a home care nurse who visits once a week. The total cost of this is approximately $7000 for nursing visits, antibiotics and supplies ($120 per visit for eight nursing visits plus $143 per day for antibiotics)

The social worker informed him that Medicare would not pay for home care nurse visits or supplies. BUT, Medicare pays for inpatient rehabilitation, which he would be eligible for to receive these antibiotics. Given the choice of paying $7000 for home administration versus $0 for inpatient rehabilitation, naturally he chose inpatient rehabilitation.

The problem is, is that his inpatient stay costs taxpayers approximately $21,000. $350 for room and board plus additional costs for antibiotics and supplies, totaling approximately $500 a day. Furthermore, although he was well enough to be discharged home before Christmas, he needed to stay until he could be placed in rehab. Because of holiday scheduling, most rehabilitation facilities were not accepting admissions. Thus, he had to stay in the hospital an extra four days in the hospital over the weekend and holidays. Given that the average cost of a hospital stay is $2338 in Maryland that added an additional $9352 or so of unnecessary expenses.

In sum, because financial incentives encouraged my patient to spend $0 rather than $7000 out of pocket, Medicare spent an unnecessary added $30,000 on his hospitalization and care.

Is the Patient Safety Movement in Critical Condition?

Feb 18, 2013• 18

By Bob Wachter, MD

These should be the best of times for the patient safety movement. After all, it was concerns over medical mistakes that launched the transformation of our delivery and payment models, from one focused on volume to one that rewards performance. The new system (currently a work-in-progress) promises to put skin in the patient safety game as never before.

Yet I’ve never been more worried about the safety movement than I am today. My fear is that we will look back on the years between 2000 and 2012 as the Golden Era of Patient Safety, which would be okay if we’d fixed all the problems. But we have not.

A little history will help illuminate my concerns. The modern patient safety movement began with the December 1999 publication of the IOM report on medical errors, which famously documented 44,000-98,000 deaths per year in the U.S. from medical mistakes, the equivalent of a large airplane crash each day. (To illustrate the contrast, we just passed the four-year mark since the last death in a U.S. commercial airline accident.) The IOM report sparked dozens of initiatives designed to improve safety: changes in accreditation standards, new educational requirements, public reporting, promotion of healthcare information technology, and more. It also spawned parallel movements focused on improving quality and patient experience.

As I walk around UCSF Medical Center today, I see an organization transformed by this new focus on improvement. In the patient safety arena, we deeply dissect 2-3 cases per month using a technique called Root Cause Analysis that I first heard about in 1999. The results of these analyses fuel “system changes” – also a foreign concept to clinicians until recently. We document and deliver care via a state-of-the-art computerized system. Our students and residents learn about QI and safety, and most complete a meaningful improvement project during their training. We no longer receive two years’ notice of a Joint Commission accreditation visit; we receive 20 minutes’ notice. While the national evidence of improvement is mixed, our experience at UCSF reassures me: we’ve seen lower infection rates, fewer falls, fewer medication errors, fewer readmissions, better-trained clinicians, and better systems. In short, we have an organization that is much better at getting better than it was a decade ago. Continue reading…