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Tag: Merrill Goozner

Anatomy of a Walletectomy

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By Merrill Goozner

It all began when Dr. Renee Hsia of the University of California at San Francisco received a simple request from a good friend who had checked into a local hospital for an emergency appendectomy. The fairly routine procedure took place 19,368 times during 2009 in California.

After he returned home, he received a bill from the hospital for $19,000, his co-payment for the parts of the $54,000 operation that his insurance company didn’t cover. “He wanted to know if this was the usual and customary charge for a one-day stay in the hospital,” she recalled.

And thus began her research into pricing variability in the state, which was published this week in the Archives of Internal Medicine. The prices ranged from $1,529 to $182,955 with the median hospital charge of $33,611, the study showed.

The prices not only varied between hospitals, they varied within hospitals. The largest spread occurred at one hospital, which Hsia wouldn’t reveal, where the cheapest appendectomy went for $7,504 while the most expensive charged was $171,696. There were numerous hospitals where the spread was $100,000 or more.

“They had the same diagnosis, but different things could have been done,” she said. For instance, one patient could have had multiple imaging tests and robotic laparoscopy, while the other received no imaging and a regular laparoscopy. There’s no evidence to suggest one set of alternatives had better outcomes than the other.

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How Obama Hits Health Providers in Deficit Plan

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By MERRILL GOOZNER

President Obama’s populist message on taxes was replicated on the health savings side of his deficit-reduction plan, which would cut spending on Medicare and Medicaid by $320 billion over the next decade and $1 trillion in the following decade.

The bulk of the savings would come from companies that provide goods and services to the programs. Payments to drug companies would be slashed by $135 billion by offering seniors in Medicare the same discounts currently mandated for poor people in Medicaid. An additional $42 billion in program savings would be achieved by reducing payments to nursing homes and home health care agencies.

And those are just the major hits taken by health-care providers in the plan, which is already drawing fierce opposition from lobbyists for industries that get whacked. Rural hospitals, big city teaching hospitals, biotechnology firms, and durable equipment manufacturers also would be in for payment cuts under the Obama blueprint.

Major trade associations representing provider groups immediately blasted the proposal, playing the same jobs card the president is using. The Pharmaceutical Research and Manufacturers Association “opposes implementing Medicaid’s failed price controls in Medicare Part D,” the group said in a prepared statement. “Such policies would fundamentally alter the competitive nature of the program, undermine its success, and potentially cost hundreds of thousands of American jobs.”

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The Untold Obama Administration Success Story

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By MERRILL GOOZNER

One wonders what the Obama administration has to do to get a little credit. I’m sitting on vacation, looking at the ocean most of the day, and spending about a half hour on line at night erasing unread emails, killing out unread RSS feeds, and checking up on my declining retirement prospects. Amid the clutter, a series of press releases from the Inspector General of the Health and Human Services Department caught my eye. Here are the headlines, with links (I’d link to the press coverage, but near as I can tell, there was none):

That was Tuesday. On Monday, the HHS sleuths put out this press release:

FORMER CHAIR OF TEMPLE’S OPHTHALMOLOGY DEPARTMENT CONVICTED OF HEALTH CARE FRAUD
PHILADELPHIA – A federal jury today convicted Dr. Joseph J. Kubacki, 62, of Destin, Florida, of 150 counts of health care fraud, wire fraud, and making false statements in health care matters, announced United States Attorney Zane David Memeger. Kubacki was the Chairperson of the Ophthalmology Department of the Temple University School of Medicine and also served as the Assistant Dean for Medical Affairs when, between 2002 and 2007, he caused thousands of false claims to be submitted to health care benefit programs with false charges totaling more than $4.5 million for services rendered to patients whom Kubacki did not personally see or evaluate. A sentencing hearing has not yet been scheduled.

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Healthcare Spend at Historic Low

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By MERRILL GOOZNER

In a rare bit of good news for the Obama administration and budget policymakers,  health care costs increased last year at their slowest pace since the advent of Medicare and Medicaid in the mid 1960s.

The new analysis, released on July 25 by officials at the Centers for Medicare and Medicaid Services, the agency that administers the two programs, showed health care spending grew last year at a “historic” low  3.9 percent rate, which is slightly below 2009’s record-setting low of 4.0 percent. Health care spending as a share of the economy remained stuck at 17.6 percent, a welcome change from most years when it increases its share of total economic activity.

At a time when the White House and congressional leaders are worried about rampant long term growth of the government’s major health care  insurance programs for seniors and the poor, the new data will allow government actuaries to project growth in  Medicare and Medicaid over the next decade will be less than previously feared. This could potentially ease the task of the Obama administration and congressional leaders somewhat when they finally negotiate an agreement for slowing the growth of entitlement programs to help reduce the deficit.

Moreover, CMS actuaries are now saying the cost of insuring 30 million previously uninsured Americans under the president’s signature health care reform bill will add only a sliver to overall spending, and that increase is about half the projected growth rate of a year ago.Continue reading…

FDA Should Add a Comparative Effectiveness Arm to Final Trials

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By MERRILL GOOZNER

The Food and Drug Administration’s Prescription Drug User Fee Act is up for reauthorization next year, and so is the consumer and drug industry face-off over the contentious issue of comparative effectiveness research (CER). Consumers, patients and some physicians are demanding that CER be required of all new drugs coming to market when there are already FDA-approved therapies for the same condition. They say it will give payers and patients immediate feedback on the relative worth of the latest drugs, which are always more pricey than what preceded them, especially if the older drugs are coming off patent.

Industry opposes including CER arms in final efficacy trials. The companies claim it will place additional costs on the already expensive new drug development process; provide inadequate information for actually divining the relative worth of two competing therapies; and dissuade companies from investing in follow-on drug research, which can turn up drugs that are significantly better than older drugs.

The American Enterprise Institute’s Scott Gottlieb, who served in the FDA during the Bush administration, this week offered a lengthy brief in support of the industry position. Unfortunately, he sets up a straw man in order to knock down what could be a very effective tool for lowering the cost of medicine. It behooves industry leaders to ignore his advice, and to ignore the bleating of their marketing departments’ incessant demand for follow-on drugs.

 

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Vouchercare for Cancer

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By MERRILL GOOZNER

The health care cost debate takes place on two stages using two languages, one scientific, the other economic. The net result is a failure to communicate.

The scientific texts emanated over the weekend from the American Society of Clinical Oncology meeting in Chicago. Ongoing clinical trials showed that science has come up with new drugs that can reduce the incidence of breast cancer and prolong life for people with skin cancer. The former is an estrogen inhibitor that would have to be taken by tens of millions of older women to have a major impact on reducing the rate of breast cancer. The latter would only be given to a subset of the 68,000 new cases of melanoma each year, and would extend life from a few months to a few years for some of the 7,700 who die from the disease each year. Again, most of those people are older, although there are a number of younger people, especially young women, who disproportionately get advanced skin cancer.

For both groups, the cost to the health care system when these drugs are approved, as they inevitably will be, will be calculated in the billions. Medicare will pick up the lion’s share of the tab, since most of the patients in both groups will be over 65.

Now let’s step around the corner to stage two, where the debate in this morning’s papers (if you read the Washington Post and New York Times every day, as I do) is over Rep. Paul Ryan’s plan to turn Medicare into a voucher program. Paul Samuelson, the top economics columnist in the Post, essentially endorses the plan saying “under Ryan’s plan, incentive would shift. Medicare would no longer be an open ATM; the vouchers would limit total spending.” What he doesn’t say is that it would only limit total spending by government. It would require seniors to pick up a growing share of the bill, and limit their own purchasing of health care, either by purchasing plans that didn’t cover expensive end-of-life care, or simply denying themselves routine treatments to avoid co-pays and deductibles.Continue reading…

The Role of Conflicted Science in the Cell Phone-Cancer Link

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By MERRILL GOOZNER

Dr. Len over at the American Cancer Society is raising legitimate questions about the early release of findings by the World Health Organization’s International Agency for Research on Cancer (IARC) that cell phone use may increase the risk of brain cancer (hat tip to Gary Schwitzer’s HealthNewsReview).  The actual study — drawn from an analysis of “hundreds of scientific articles ” — won’t be published in Lancet Oncology “for a few days,” according to IARC. Says Dr. Len:

Unfortunately, drawing broad and sweeping conclusions based on a press release and a news conference leaves many of us wondering just what the evidence shows that led to the conclusion announced today that “radiofrequency electromagnetic fields” may be possibly cause cancer in people.

The evidence, when it appears, will be murky. A few years ago, I spent several months reviewing some of the evidence in this troubling field, largely from a conflict-of-interest perspective. The global telecommunications industry funds much of the science. Even when government agencies fund research, the results are difficult to interpret. The studies invariably involve looking for a very small number of negative health outcomes (brain cancers) in very large populations. Two researchers, looking at the very same set of epidemiological facts, will often come to different conclusions. And, as often as not, those conclusions correlate with whether the the researchers are independent or whether they are on industry’s payroll.Continue reading…

How to Lower Cancer Care’s Costs

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By MERRILL GOOZNER

A year-and-a-half ago, Howard Brody of the University of Texas Medical Branch in Galveston wrote an opinion article in the New England Journal of Medicine calling on every medical specialty to develop ways of cutting the cost of care. Citing financial sacrifices that had been made by insurers, hospitals, drug and device companies in the then pending health care reform bill, Brody said physicians could do their part “if they were willing to practice more in accordance with evidence-based guidelines and to study more seriously the data on regional practice variations.”

Toward that end, he called on each specialty to come up with a list that “would consist of five diagnostic tests or treatments that are very commonly ordered by members of that specialty, that are among the most expensive services provided, and that have been shown by the currently available evidence not to provide any meaningful benefit to at least some major categories of patients for whom they are commonly ordered.”

In the NEJM last week, two oncology specialists — Thomas Smith and Bruce Hilner of Virginia Commonwealth University — took up the challenge. They created a “top five” list of common oncology practices, which, if limited to situations where they were truly clinically useful, would sharply lower the cost of cancer care. Their lead paragraph noted the need for taking these steps:

Annual direct costs for cancer care are projected to rise — from $104 billion in 2006 to over $173 billion in 2020 and beyond. This increase has been driven by a dramatic rise in both the cost of therapy and the extent of care. In the United States, the sales of anticancer drugs are now second only to those of drugs for heart disease, and 70% of these sales come from products introduced in the past 10 years. Most new molecules are priced at $5,000 per month or more, and in many cases the cost-effectiveness ratios far exceed commonly accepted thresholds. This trend is not sustainable.Continue reading…

CABG in Decline

By MERRILL GOOZNER

The number of Americans with serious heart disease in need of hospital treatment is on the decline. A new study in today’s Journal of the American Medical Association shows the overall rate of coronary revascularizations — ranging from the coronary artery bypass graft (CABG) surgeries to in-and-out catheter-based procedures like angioplasties and stent insertions — fell from just under 1,500 per million adults a quarter in 2001 to less than 1,250 per million adults a quarter in 2008, a 15 percent decline.

The most intriguing finding in the data was that virtually all of the decline was in the most serious cases — those requiring CABG, which fell by about a third. The rate of percutaneous coronary interventions (where they snake a catheter through the thigh into the blood vessels feeding the heart, propping them open with either drug-eluting or bare metal stents) remained virtually unchanged.

The study authors, who hailed from the Philadelphia Veterans Affairs Medical Center, suspect the decline in CABG was driven by “a sizable shift in cardiovascular clinical practice patterns away from surgical treatment toward percutaneous coronary interventions” using catheters (so-called PCI). In other words, in recent years people with serious heart disease are more likely to be treated with the less invasive procedure.Continue reading…

GOP Bill Promotes Greater Federal Control of Exchanges

By MERRILL GOOZNER

The latest Republican effort to undermine health care reform hits the House floor this week with the law of unintended consequences clearly in play. If the bill actually became law – an unlikely event since the Democrats still control the Senate and the White House – it would promote the federal takeover of health care, something Republicans have consistently opposed on the campaign trail.

The legislation, sponsored by Rep. Fred Upton, chairman of the Energy and Commerce Committee, withdraws federal financial support for state-based insurance exchanges. The exchanges, which will provide a clearing house for health insurance policies sold to individuals and small groups, are supposed to be up and running by January 2014.

The original Patient Protection and Affordable Care Act created an open-ended federal grant program to help states defray the costs of setting up the exchanges. Eliminating that support would save the federal government about $1.9 billion, according to the Congressional Budget Office, which released a cost estimate for H.R. 1213 late Thursday.Continue reading…

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