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Tag: Obama administration

Please, do not ban reference-based pricing

We were stunned (yes, we're naïve and idealistic) to read in The Kaiser Family Foundation newsletter and The Wall Street Journal article last week that CMS (surprise) and the now former the Bush Administration (no surprise) were proposing a ban on reference-based prescription drug pricing under Medicare Part D.

Health and Human Services Secretary Tom Daschle has said the Obama Administration will work to see that health care “will be guided by evidence and effectiveness, not by ideology.” This proposed ban is in direct opposition to that commitment.

Reference-based pricing drives appropriate clinical decision-making, appropriately decreases health care costs, and appropriately empowers consumers in the health care decision process. It is one of the few rationally applied cost control tools we have. It should be a model – not a pariah.

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Rationing — how will it be spun?

The House of Representatives’ $825-billion stimulus package proposed last week included $1.1 billion to fund comparative effectiveness research — research that evaluates two or more medical technologies or treatments to see which is most effective.

This is welcome news to those who say the need for such efforts to ensure the U.S. gets more value from its abundant health care spending is long overdue.

But not everyone thinks comparative effectiveness research is a good idea. Some say it is a front for rationing health services — for allowing the government to make health care decisions instead of doctors.

Inciting fears of rationing will be an easy card to play in the forthcoming health reform debate. If the national goals are to provide universal coverage and control costs, it seems setting some limits on health care would be necessary.

The use of comparative-effectiveness analysis and separately cost-effectiveness analysis fall squarely within this anticipated debate.

Fans of comparative effectiveness research include key players in the Obama Administration: Tom Daschle, Secretary of Health and Human Services;  Peter Orszag, Office of Management and Budget director; and Carolyn Clancy, acting director of the Agency for Healthcare Research and Quality (AHRQ).

Many developed countries, including Germany, England, Canada and Australia, already invest in this research and use it to decide what health services to pay for. Many health policy experts, health economists and health plan leaders — both public and private — say the U.S. is behind the times.

Nearly everyone agrees that having more evidence to support clinical decisions is a good thing, but there’s strong disagreement on whether it should be mandatory to guide coverage decisions and whether the analysis should factor in the relative costs of treatments.

Scott Gottlieb, a fellow at the conservative American Enterprise Institute and former FDA official, warned Americans this week in the Wall Street Journal about this “mirage” Democrats are calling comparative effectiveness.

“In Britain, a government agency evaluates new medical products for their “cost effectiveness” before citizens can get access to them. The agency has concluded that $45,000 is the most worth paying for products that extend a person’s life by one “quality-adjusted” year. … Here in the U.S., President-elect Barack Obama and House Democrats embrace the creation of a similar ‘comparative effectiveness’ entity … They claim that they don’t want this to morph into a British-style agency that restricts access to medical products based on narrow cost criteria, but provisions tucked into the fiscal stimulus bill betray their real intentions.”

Gottlieb makes comparative clinical effectiveness analysis and cost-effectiveness analysis seem as though they are the same. They aren’t. It’s true that England uses both in its determination, but supporters of the creating a centralized center to do comparative effectiveness research in the U.S. split on whether or not costs should be included.

Comparative effectiveness research and how it could be used to shape health policy is complex with no singular definition, method or form. Proponents may overstate its ability to save money (it actually doesn’t in most countries where it’s used). Opponents may write it off as an underhanded attempt at rationing. THCB will tease apart those arguments over the coming months. Stay tuned.

Nomination for U.S. Surgeon General

This is a reprint of the letter originally posted to Facebook.

Dear President Obama and Former Senator Tom Daschle:

As a physician leader in the medical specialty Preventive Medicine for 30 plus years, I am writing this open e-letter to you to strongly urge you to consider George D. Lundberg, MD as our nations next U.S. Surgeon General.

My letter relates to the distinctly unique qualifications that Dr Lundberg would bring to this important position and to express my views about the position itself since various previous administrations have held variable views on how to define the activities of the position itself. And the “power of personality” of some of our best US Surgeon Generals has influenced the perception of the role.

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Five “Shovel-Ready” Health Care Reforms

Microsoft Health Vault’s leader Peter Neupert has a wonderful blog post that makes two important points really well. One message is that health care reform is about the outcomes, not the technology. We should think expansively about which technologies to invest in, based on the results we want to get.

The other message is the economic stimulus package is different than the reform effort. It is moving at hyper-speed through Congress, and it may be difficult for staffers and other advisors to sort through and incorporate what may seem like opposing Health IT views against a backdrop of traditional ideology and extremely forceful special interest lobbying.

Even so, there’s consistency among the health care professionals who worry about these issues all the time. Peter unexpectedly discovered that the messages of his fellow panelists from the Health Leadership Council, the National Quality Forum, the Permanente Federation and the General Accounting Office were remarkably in sync with his own testimony to the Senate Health, Education, Labor and Pensions Committee.

Congress is about to make some big moves in health care that will require immense resource expenditures but, depending on what we pay for, may or may not bear the fruits we hope for. They should move carefully. Not all health care reform has to be labyrinthine. Not all ideas must require huge cost or take years to come to fruition and gain market traction. There are relatively simple actions that are available now, and that the Obama Health Team could tackle to effect tremendously positive, immediate impacts on the system.

Of course, right now the Health IT industry is focused on the promise of a huge stimulus windfall that would be dedicated to their products. But the opportunities we describe below follow principles that have broad support among students of the health care crisis. Two would change the way we pay for health care services, tying payments to documented results. Three are based on how we pull together and make use of the data that can drive clinical and financial decisions, and they overlap, though not perfectly, in their potential. Still, if any system adjustments can be passed through policy initiatives that focus on what’s best for the common rather than the special interests, these should be among the most straightforward.

Payment
Re-Empower Primary Care
There is general agreement that primary care is in crisis, the result of years of abuse and neglect by the medical establishment and by CMS. In simple terms, the primary care/specialist ratio in the US is 30/70. In all other developed nations, its about 70/30. And our costs are roughly double theirs.

We should allow primary care physicians to do the jobs they were trained for, changing their roles from “gatekeepers” to “patient advocates and guides.” We should immediately start financially rewarding them for collaborating with specialists to manage patients throughout the full continuum of care. Keep in mind that, as the Dartmouth Atlas and other studies have made clear, most health care waste is concentrated in the sub-specialties and in inpatient settings, incentivized by a fee-for-service reimbursement system that rewards more procedures, independent of their utility.  One very thoughtful approach to invigorating primary care has been advanced by Norbert Goldfield MD and colleagues.

Of course, truly re-empowering primary care will require more than just paying primary care physicians more. Higher reimbursements will help them afford to spend more time with each patient, yes, but PCPs also need help acquiring tools that can help them better manage those patients. And they need the authority to work collaboratively with specialists. Challenging, but certainly doable and important!

Changing America’s current imbalance between primary and specialty care should drive significant downstream waste from the system, dramatically improving quality and reducing cost.

Increase the Incentives For Programs That Tie Payment To Outcomes
Projects like the CMS/Premier Hospital Quality Incentive Demonstration (HQID), in which 250 participating hospitals got 1-2 percent bonuses for achieving quality improvements, have clearly demonstrated that incentives work. The hospitals that pursued the incentives made greater strides in quality improvements than their peers who did not work toward the incentives.

But we need to make the financial incentives large enough to drive real paradigmatic change. Too many programs offer incentives that are trivial in the minds of providers. Does it make sense for physicians in small, busy practices to rework their office flows to try to meet the challenges associated with hitting targets in exchange for a 1 or 2 percent financial bump, tied to a fraction of their patient population?

Now that there’s no question that incentives work, we could easily give these programs teeth by raising the incentive antes to 15 or 20 percent, while also demanding commensurate levels of savings. And we should go in, understanding that the goal is to drive out unnecessary care, and create expectations that,  by managing better upfront, the total spend will be lower.

Data

Establish a National All-Payers Database
Data sets, including those comprised of health care claims, must be large to generate credibly useful information.

But health care is financed through many different payer streams and by many players within each stream.  Nearly all treat their data as proprietary, and information remains fragmented. So, for example, physicians rarely receive useful information on their complete pool of diabetic patients: instead, they get small slices of data from each payer, each analyzed using a different proprietary methodology. Or, we fail to accumulate adequate sample sizes to identify which treatments, interventions, drugs, devices, health plans, physicians or facility services provide the best value.

But merging those data across payers and making the aggregated set freely available would create the basis to identify true evidence-based best clinical and administrative results. Based on hundreds of millions or billions of records, we might be able to credibly identify which professionals, services or approaches most consistently produce the best results within value parameters. The data set would always be building, providing an always slightly-new base for answering our most difficult questions. Together with the analytical tools that are also becoming stronger and more refined, the potential is vast.

Of course, health plans, always politically formidable, might fight tooth and nail to maintain the competitive advantage they believe is inherent in their data. But health care is a special enterprise, with objectives that are ultimately rooted in the common interest, so they have no real excuse to refuse this. And health plans, like the rest of us, would gain access to much larger data sets that can be mined to advantage.

There also are precedents here. Several states have already begun to establish all-payer databases. At a June 2008 meeting, a presentation on Maine’s experience highlighted 3 fundamental, telling principles that are challenges to any effort.

1. Nobody wants to pay to develop and manage the database.
2. Nobody wants to contribute their data to the database.
3. Everyone wants the aggregated data that develops in the database.

The solution: make it a national effort, paid for by CMS, and with mandatory participation, user fees, and open access to the data.

Create Uniform Nationally Accessible Disease Registries

Many physicians have come to appreciate the value of disease registries. Registries allow clinicians to count all active patients with distinct conditions, e.g. hypertension or diabetes. They can track characteristics within a patient subset, e.g. diabetic patients on a particular medicine. They can monitor and stratify patient status and progress within each group, and generate reminders and alerts to assure guideline level care. And they can identify trends in performance and, with relative ease, get a sense of what works and what doesn’t.

Even so, many registries are still in silos, meaning that the sample sizes remain small and that the parameters that define the registries’ characteristics often vary between implementations.

What we need are freely available, Web-based registries with easy data entry and easy querying capabilities. The impact on our management of patients with chronic illness, who consume 70 percent of our health resources, would almost certainly be powerfully positive.

Release Medicare’s Physician Data
Nearly a year and a half ago, the consumer advocacy organization Consumer Checkbook sued the US. Department of Health and Human Services (HHS) for the Medicare physician data in four states and DC. HHS argued that physicians have a right to privacy, even though, in the case of Medicare and Medicaid, they are vendors taking public dollars, and even though hospitals do not enjoy the same protection from scrutiny. In August 2007, the court held with Checkbook, and on the AMA’s “advice,” HHS promptly appealed, locking up the data for the duration of the Bush Administration.

The large commercial health plans have traditionally considered their claims data proprietary and so have not made their data sets publicly available. Self-funded health plans, administered by Third Party Administrators (TPAs), develop sizable data sets but have resisted collaborating, and have also not expressed an interest in making their data available.

So for those outside the health plan community, there are few, if any, data sources with sample sizes large enough to accurately evaluate and profile physician performance. This is significant, since studies have shown that there can be profound differences, 6x-8x, in resource consumption (i.e., cost) between the least and most expensive physician (within a specialty and market) to obtain the identical outcome.

In other words, not all doctors perform equally. While more patients are paying out-of-pocket for a larger portion of care, there is still virtually no credible information to guide their physician choices.

The American people could quickly learn which physicians within a specialty and a market consistently get the best outcomes at the lowest costs if Medicare physician data were made publicly available. Releasing these data would also put pressure on physicians everywhere to understand their own numbers, and to improve if their performance values are lacking.  We see this as beneficial to the great majority of physicians who seek excellence in their work.

Smoothing the Way

American health care is a vast enterprise in which millions of professionals and hundreds of thousands of organizations vie for an ever larger portion of what has historically been an always growing resource pool. The chaos and dysfunction that has developed in health care is largely due to two system characteristics. One is the fee-for-service reimbursement system that has rewarded more rather than the right care. The other is a lack of transparency that prevents us from knowing and understanding performance, even when that performance is dangerous: what works and what does not, which approaches are high and low value, who does a good job and who does not.

The five action steps outlined above would allow us to better identify the problems and opportunities in our health system, as well as the strongest solutions to drive decision-making. Then they would leverage that information to create strong incentives for the right care, organically changing the dynamics of care and reimbursement and, to the degree possible, smoothing the transition required to heal the way we supply, deliver and finance care in America.

Why It is Inevitable That the Debate over Health Care Will Be Partisan

In a post earlier this week, Bob Laszewski reported that “the extension and expansion of the State Children’s Health Insurance Program (SCHIP) has now passed the full House and the Senate Finance Committee and is on its way to the full Senate where it will undoubtedly also pass and then be reconciled with the similar House bill.

“However,” he warns, “the way it is being done does not give me a good feeling.

“In the Senate Finance Committee the Democrats were only able to get the support of one Republican–Maine’s Olympia Snowe–on the way to a 12-7 approval.

“They did not have the support of the ranking Republican, Chuck Grassley of Iowa.”

Laszewski is worried: “Senate Finance Democrats lost the support of the Republicans when they insisted on departing from last year’s bipartisan agreement to leave existing policy on covering the children of legal immigrants as is. As it now stands, a legal immigrant agrees not to apply for Medicaid and SCHIP benefits for the first five years they are in the country. Under the new rules states would have the option of covering legal immigrants. The new bill also left out provisions from the earlier bipartisan comprise to limit benefits for higher income families.Continue reading…

New NRC Report Finds “Health Care IT Chasm,” Seeks New Course Toward Quality Improvement and Cost Savings

Like the Institute of Medicine’s (IOM) 2001 counterpart report, “Crossing the Quality Chasm,” a new report from the National Research Council of the National Academies is complex, full of new ideas assembled from multiple disciplines, and is likely to have seminal importance in framing public policy from now on. “Computational Technology for Effective Health Care:  Immediate Steps and Strategic Directions” was released last Friday, January 9, 2009 in draft, but there is so much to comment on that I think it’s wise to begin with a quote from the committee that sums up the central conclusion:

In short, the nation faces a health care IT chasm that is analogous to the quality chasm highlighted by the IOM over the past decade. In the quality domain, various improvement efforts have failed to improve health care outcomes, and sometimes even done more harm than good. Similarly, based on an examination of the multiple sources of evidence described above and viewing them through the lens of the committee’s judgment, the committee believes that the nation faces the same risk with health care IT—that current efforts aimed at the nationwide deployment of health care IT will not be sufficient to achieve the vision of 21st century health care, and may even set back the cause if these efforts continue wholly without change from their present course. Success in this regard will require greater emphasis on the goal of improving health care by providing cognitive support for health care providers and even for patients and family caregivers on the part of computer science and health/biomedical informatics researchers. Vendors, health care organizations, and government, too, will also have to pay greater attention to cognitive support. This point is the central conclusion articulated in this report. (emphasis added)

It would be difficult to find a more sober indictment of US health care IT policy and implementation over the past decade than what is contained here.

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Shocker–Karen Ignagni almost tells the truth

The NY Times’ Robert Pear has an article on the politics of the Obama Administration introducing a public plan as part of FEHBP.

As you might expect a boat load of Republicans who were told in grade school that private is good and public is bad are concerned about this causing the demise of private health plans–even though that would clearly benefit the country. Of course Pete Stark is quite happy to say that it’s not that Medicare underpays (as Charlie Baker said here last week), but it’s that private plans over pay.

So why is that the case? Well you knew that I couldn’t resist the appearance of my favorite lobbyist. Here’s what Karen Ignagni says, and — this is the shocker– it’s half true.

Karen M. Ignagni, president of America’s Health
Insurance Plans, a trade group, said the consolidation of the hospital
industry in the last seven or eight years had increased the market
power of hospitals, thereby reducing the ability of insurers to
negotiate discounts.

Actually it’s been more
like twelve to fifteen years since big players started merging (IFTF’s
Ellen Morrison wrote a great report about that in 1994 called "The Six Americas").
By the late 1990s Sutter, for example, was facing down Blue Cross of
California on price and winning. And of course in Boston Partners was
getting bigger and bigger, and facing down Blue Cross and the other plans. (Leading occasional THCB contributor and Beth Israel Deaconess CEO Paul Levy to become a big whiner, according to Partners Chairman Jack Connors). So Karen is telling the truth.

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Let’s Reboot America’s HIT Conversation Part 1: Putting EHRs in Context

Kibbe & Klepper are back with an update to their pre-Christmas piece on EHRs and the forthcoming Obama Administration’s investment policy towards them. Lest you think that this is just a small group here on THCB and fellow traveler blogs shouting to each other, I’d point you towards the Boston Globe article about their previous "Open Letter," which shows that this discussion (and a similar piece on THCB from Rick Peters) appears to be being taken very seriously. As it should–Matthew Holt

On Dec. 19, we published an Open Letter to the Obama Health Team,
cautioning the incoming Administration against limiting its Health
Information Technology (IT) investments to Electronic Health Records
(EHRs). Instead, we recommended that their health IT plan be rethought
to favor a large array of innovative applications that can be easily
adopted to result in more effective, less expensive care.

The
response to that post was vigorous. We received many comments and
inquiries from the health care vendor, professional and policy
communities – urging us to provide more clarity. One prominent
commentator called to ask whether we, in fact, supported the use of
EHRs. We both have been active EMR and health IT supporters for many
years. Dr. Kibbe was a developer of the Continuity of Care Record
(CCR), a de facto standard format for Electronic Medical Records
(EMRs), and has assisted hundreds of medical practices to adopt EHRs.
Dr. Klepper has been involved in EMR projects for the last 15 years,
and the onsite clinic firm he works with provides every clinician with
a range of health IT tools, including EMRs.

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Is Massachusetts a model for national reform?

I get asked this question a lot these days, which shouldn’t be that surprising.  Harvard Pilgrim is headquartered in Massachusetts, and the Massachusetts health care reform plan is already a couple of years old.  More importantly, it has added about 440,000 people to the insured ranks (185,000 through unsubsidized private plans and another 255,000 through subsidized, Medicaid-like coverage), has maintained high employer participation (over 70%) and doesn’t appear to be crowding out private coverage as public coverage expands.

But my answer to this question remains “it depends.” There were profound differences between Massachusetts and the rest of the country before health care reform took center stage here that make relying on our experience somewhat challenging for the nation as a whole. For example, Massachusetts already had guaranteed-issue requirements for individual health insurance coverage even before reform. Today, most states don’t. So in Massachusetts, individual coverage was available to anyone who wanted to buy it, but it was really, really expensive.

That’s because most of the people who buy individual coverage — absent a mandate to purchase — usually plan to use health care services once they purchase the insurance. Insurance works through risk pooling – a small number of people who get sick spend the premiums paid by a much larger group of people who don’t.  If most of the people who buy the product plan to use it, there’s not enough healthy people to keep the overall price down.Continue reading…

Washington, Please Don’t Bail Out the Health Care Industry

A health care Marshall Plan — $50 Billion stimulus to get electronic health records (EHRs) in every doctor’s hands or $50,000 to each physician -– what an incredible marketing job.

Detroit, are you listening? Stop whining to Congress that you need a bailout. Tell them you want to be the new alternative energy Manhattan Project, get the money, and then keep building SUVs and flying around in corporate jets.

To Congress, Daschle, and Obama, please don’t do this. Our industry, health care, combines the worst of the Big Three automakers with the worst of the hubris, dishonesty, and failure of the public trust of Wall Street. Please do not bail us out.

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