I’m beyond baffled by this NY Times report: 60 Companies Plan to Sponsor Health Coverage for Uninsured. I’m taking 2 aspirin and will comment in the morning.
INDUSTRY: The Birmingham kid is innocent!
As the trial begins of Healthsouth CEO Richard Scrushy for the largest outright health care fraud ever, it’s good to know that in America you can start a huge company from nothing, be totally responsible for all its success, pay yourself vast amounts of money–enough not only to buy all the cars, houses and planes you need but also to sponsor Christian rock boy bands and hire in actors from The Wonder Years as PR Monkeys–and go through seemingly dozens of CFOs. And all the while you never need to have any idea at all about the financial state of your own company.
QUALITY: Pawelski’s out of line in accusing the NCI by Oren Grad
Oren Grad, a physicians and an independent consultant whose work focuses on policy and strategy in the health sciences, didn’t think much of what Greg Pawelski said yesterday on THCB about cancer research being aimed at the wrong things. Nor did he much appreciate the way that he said it. Again, I’m no expert in these issues and, although I have some sympathy with the position that we do too much at the margin in oncology that promotes the profit of the oncologists rather than of the patients, I understand that this is a very, very delicate area. Greg has good reasons for holding his positions, but here’s Oren’s explanation of why he’s wrong.
I have to say that Greg Pawelski’s post today on cancer research was annoying. I think he’s out of line in both tone and substance, and his "expose" is in fact pretty stale by now.
It’s not as if the leadership of NCI aren’t very well aware of the issues Greg raises, as well as many more that he doesn’t. The CTWG initiative described in these links is but one of several being pushed vigorously by NCI director Andrew von Eschenbach. A lot of very smart, very busy people both within and outside NCI are currently chewing up substantial time figuring out how to adjust NCI’s approach to meet today’s challenges rather than yesterday’s.
From a scientific perspective as well, the implication that Greg’s found magic answers that are being scandalously overlooked is way off base. Both metastasis and ways of individualizing treatment are very much on people’s minds, and will, appropriately, see increased research effort in coming years. Only time will tell whether the insights brought by these efforts will in fact pan out in improved patient outcomes. Cancer is fundamentally a very hard problem.
It’s certainly difficult to redirect a large public agency like NCI quickly. But as a long-time observer of cancer research policy and bureaucratic politics, I do think that as the current initiatives play out we can expect to see changes that will help NCI respond more effectively to new scientific findings and opportunities.
POLICY: Florida solves Medicaid cost problem (well, not really)
As you’d expect from the most efficient, transparent, clean-government minded state in the nation, Florida has figured out how to solve its Medicaid cost problem. It’s planning on privatizing Medicaid and making recipients buy in with a voucher into managed care plans. I said plenty about Medicaid in a post last week, so I won’t repeat it all. But three things struck me. First, according to the leader of Florida’s Democrats, the Medicaid budget is about to overtake the education budget. I know they have lots of old and poor people down there, but can that really be true? (I’d like to understand this explanatory page but unless I’m pretty dumb it contradicts itself in the notes below the table). In California where we rival Mississippi in propping up the table on per capita education spending, health spending is only a third of education spending. So is Florida really spending no money on educating its kids? The California state budget division is below, and it shows that we spend a lot less on health than on education.
(From California Budget Basics, by Stephen Levy).
Secondly, 70% of Medicaid dollars in most states go on the care of the poor, elderly and disabled, mostly on nursing home care. No managed care organization has a clue how to deal with those folks, so really we are talking about saving money (potentially) by going after only the other 30% of the dollars. Not really much likelihood of big savings there.
Finally, states are the FILOs of budget deficits (first in, last out). But if you believe the Bush rhetoric about how the economy is getting better (and assuming you are a governor named Bush you should do), shouldn’t this picture be getting better? And if it is, why does it need radical surgery now?
If you want to dive a little deeper into Medicaid, you might take a look at this McKinsey report on what’s wrong with Medicaid which gives some ideas for fixing it. While it’s not dumb as far as it goes, the report doesn’t unfortunately mention the actual ways Medicaid really needs to get fixed which are:a) rolling it into a universal health insurance system,b) creating a national long term care policy, andc) doing something about the scandalous state of the poor in America.
Jonathan Cohn summed it up well in an email in which he said that:
What I love is the constant dismay at the way Medicaid keeps eating up larger shares of state budgets, as if it didn’t have something to do with the fact that more and more people are becoming eligible as employer-sponsored insurance withers away.
QUALITY: Now cancer is top killer, let’s attack it using common sense, by Greg Pawelski
Greg Pawelski has posted frequently on THCB about cancer care. On the occasion of cancer becoming the nation’s biggest killer for those under 85, he appeals for sensible use of scientific funding to go after the process behind metastasis.
The Associated Press reported that Cancer is the Top Killer for Those Under 85. There has been no real progress in the treatment of most common forms of cancer. Recent NCI data showed that U.S. cancer mortality rates have increased and age-adjusted cancer mortality rates in response to treatment have not improved in several decades, despite the introduction of many new drugs. There is a mind-set of cancer culture that pushes tens of thousands of physicians and scientists toward the goal of finding the tiniest improvements in treatment rather than genuine breakthroughs, that rewards academic achievement and publication over all else.
The January 10, 2002 issue of the New England Journal of Medicine noted that 20 years of clinical trials yielded survival improvement of only 2 months for patients with advanced lung cancer. It also pointed out that oncologists at a single institution may obtain a 40-50% response rate (not cure) in a tightly controlled study, but when these same studies are administered in a real world setting, the response rates (not cure rates) decline to only 17-27%.
In the March 15, 2004 issue of the Journal of Clinical Oncology, an editorial stated that a review of all the large, prospective, randomized trials published comparing the newer taxane-based regimens, none of these regimens have increased either complete response rates or overall survival, with median survivals remaining at two years or less. This is precisely the same results which were being obtained 30 years ago.
The results of nearly 30 years of clinical investigation in the treatment of patients with cancer, neither standard or high-dose regimens had done a great deal to improve the outcome of patients. For over the past 20 years, they relentlessly combined chemical agents in various regimens with ever-increasing dose intensity and the survival for patients is exactly the same, less than two years. Not a hint of significantly improved survival.
In the March 22, 2004 issue of Fortune, an extensive expose of why there has been no progress in drug treatment of cancer in three decades, the author writes that it is not localized tumors that kill people with cancer, it is the process of metastasis, 90% of the time. Aggressive cells spreading to the bones, liver, lungs, brain or other vital areas, that are wreaking havoc. You’d think cancer researchers would be bearing down on the intricate mechanisms of invasion and spread? However, according to a Fortune examination of NCI grants going back to 1972, less than 0.5% of study proposals focused primarily on metastasis, trying to understand its role in cancer or just the process itself. Of nearly 8,900 NCI grant proposals awarded in 2003, 92% didn’t even mention the word metastasis.
So pharmaceutical companies don’t concentrate on solving the problem of metastasis (the thing that really kills people); they focus on devising drugs that shrink tumors (the thing that doesn’t). There is a national problem in the way we treat the problem. It is time to set aside empiric "one-size-fits-all" treatment of cancer for "individualized" treatment based on testing the individual properties of each patient’s cancer.
POLICY: The VA is showing the way to better chronic care
The Washington Monthly has an excellent article on care quality in the VA health system. It’s well worth reading. There’s also an excellent analysis of that article by John Rodat at Health Signals New York.
I won’t say too much more other than all the studies about how well the VA is doing with DM have all been read here by diligent THCB readers, and the idea about throwing the VA open to everyone was postulated by Dave Moskowitz on these pages a few months back. I don’t know whether Phillip Longman, the new article’s author, is merely thinking the same great thoughts — but if not, well Dave, theft is the most sincere form of flattery!
My only add would be that I had a an excellent nurse practitioner, Susan Johnston from the VA facility in Temple, Texas, on my panel at the disease management for diabetes conference last week. Sue leads the telemedicine program in the VA in central Texas and using a system from Health Hero Network she has achieved remarkable results in improving the health outcomes of patients with diabetes on her program. It’s clear that the VA is leading the way in the use of telemedicine for the care of the sickest diabetics, and it’s also clear that she and her colleagues are as dedicated and as clinically excellent as any in the nation. And any significant improvement in care whether here or elsewhere in the world needs both dedicated and talented people and new systems of care. As the IOM reported in Crossing the Chasm we can’t keep pushing our people to do more and do better without changing the system of care in which they work.
UPDATE: The ever wonderful Jane Sarasohn Kahn points THCB to a study from RAND put out last December that shows that 12 VA regions bested their surrounding community practitioners on chronic care, preventative care and disease management–and in fact any care that required a tracking process.
QUALITY: Diabetes and the modern disease management girl
So I spent the last couple of days at a disease management conference that focused on diabetes care.
There is general agreement that — at least 15 years since everyone has understood the problem — the health care system suffers from a lack of transparency, information systems, rational incentives, and care quality. Diabetes care is a microcosm of that. Type II Diabetes is a disease that’s primarily caused by years of poor living and poor care (obesity and metabolic syndrome being typical precursors). Once people get it less than 50% of them are correctly diagnosed, and after that the care of diabetics tends to be poor. Only around half get all the recommended tests and care that they need. And yet for a long time (since the DCCT trial back in the early 1990s) it’s been well known that regular monitoring of blood glucose levels can reduce the risks of further damage from diabetes. And those risks are nasty and expensive–blindness, limb amputations and heart disease. Getting diabetics to do all the things that they should do to reduce their dependence on glucose, and control their insulin levels is a great application of the education, monitoring and bullying that is modern disease management.
Disease management really started out as a front for drug company marketing so that they could pretend that they could work with PBMs and wrap services around their pills that would improve patient care. Of course they were also taken by the concept that disease management programs tend to suggest that sick people should take more drugs than they currently do. Of course some of those drugs might be generics….
But when you get beyond the high meaning rhetoric, disease management is complicated and confusing. Within the population with diabetes there are levels of illness, not to mention co-morbidities. Within disease management there are different ways of getting to patients (such as occasional mailers, phone calls, and constant monitoring via telemedicine). Once you get into the management of diabetics (or any other disease management program) it gets more complicated depending on who you are. Integrated systems want to control the costs of their sickest members; health plans typically want to sell value added services to their customers; and employers (and government) want to try to prevent the costs with their disease. But we live in a world where most diabetes disease management is developed for the less sick diabetic patient in a commercial population, while the greatest need — and potentially greatest savings — may be for a much sicker diabetic on Medicare or Medicaid.
But at a practical level, that all means that there is no clear focus on which patients to pursue. Should health plans be looking at their healthy commercial populations, or should they be ignoring them and going after the really sick people in their plans –who may be on their way into Medicare within a few years and give them no return? In the commercial world disease management services for diabetics cost something like $3 pmpm. Intervention using a telemedicine system (like the Health Buddy) can be around $50 pmpm. Obviously you need some pretty immediate savings if you are spending that much, and the VA at least seems to have decided that it is getting a return. But then again, Florida Medicaid in a rather biting criticism of Pfizer Health Solutions last year, felt that the returns from phone-based DM weren’t so great. But overall I came away from the conference no clearer on where on the financial graph the lines of the cost of intervention versus the value of the benefit intersect. And I’m not sure that anyone else really knew either.
What was interesting is how little was known about what the real ROI of different interventions on different types of people. One plan sent out postcards even though they believed them to be ineffectual because a drug company sponsored them. I mentioned to the people next to me that DM had gone full circle and was back to being drugcompany marketing. Even the phone calls may or may not be effective depending on their frequency and what was communicated in the call.
There’s an initiative in Tennessee, run by the Center for Evidence-Based Medicine at Vanderbilt in which the Blues are paying primary care docs to act as educational coaches for diabetics. This seems to be working (although it’s early days) and is having some good results, as are the folks at the VA with their nurse practitioner-led interventions and monitoring. But overall this is an industry that really doesn’t have its story straight as to what works consistently, and what’s worth paying for.
And of course while most payers don’t know if they can look forward to reaping the benefits of a costly intervention down the line, selling DM services will remain problematic. That’s why the Medicare CCIP demonstration projects about to take place are so important. The Medicare population is ground zero for DM especially for diabetics. Let’s hope that the CCIP experience tells us what DM can hope to achieve, and give us a level playing field on which to judge the value of the various interventions.
PHARMA: Viagra apparently good for your heart
And in today’s cheap shot Viagra post…
Apparently the main ingredient in Viagra is showing potential for reducing the chance of some heart diseases. In mice it’s been shown to "reverse the growth associated with heart failure, a chronic heart condition caused by infections, high blood pressure and other heart diseases." I assume that it works by the blood causing the growth of the heart being diverted elsewhere….
PHARMA: NY Times reports on the apparent demise of Merck
The NY Times has an article which essentially forecasts the demise of Merck. Other bloggers here at THCB, over at Business Word and at In The Pipeline have all written various versions of the same story but none of us have been quite as upset as the NY Times about the impact on the economics of flower shops in New Jersey.
POLICY: Are we heading for a crash and can we turn the wheel?
I’ve been at a conference on disease management for diabetes where there was an interesting talk from Brian Klepper at the Center for Practical Health Reform. I don’t know much about the Center, (here’s a PDF) but it’s positioning itself as a neutral forum for reform based on the principles that Arnie Milstein’s been espousing — using process technology to reduce health care costs.
Klepper is a pessimist and an optimist. He believes that the sky is falling and quickly. He notes that the acceleration of employers dropping coverage (67 to 63% from 1999 to 2002) is speeding up. He also had another chart showing that only 45% of employees got their coverage from their employer anymore. Plus as cost sharing of premiums is heading up as less is being offered, cost per unit of benefit is increasing. The result is that even in employer coverage, people are being priced out of the market. The impact on providers is that bad debts are rising very fast.
He reasonably thinks that Medicaid is heading to block grants, and that Medicare is heading to defined contribution. So no more money from the government. Meanwhile as private health care funding is half of all income for the system, a 5% of fall in private coverage leads to a 2.5% contraction in actual revenue. This is what’s causing a spike up 10% nationally in hospital bad debt (in a surge of people showing up at EDs who don’t have the means to their deductibles or co-pays). This is showing up first in safety net institutions, such as Grady hospital in Atlanta which last year said that they will no longer admit indigent patients. A few years back community hospitals were at 12% margins–now most are losing money or making 1-2%. But they’re building like crazy and may not be able to service the debts they’re incurring. Meanwhile half of all bankruptcies are caused by medical bills and 1 in 7 families have problems paying their bills. And worse, 2/3 of those have insurance.
In other words there is going to be a net outflow of money from the system leading to a collapse. That’s where I think Klepper’s overly pessimistic. I think that the economy can keep pumping money into health care for a decade or two before we get anywhere near that point.
He says that the health care has refused to do what it takes to limit costs. I’d agree there. Where he’s an optimist is that Klepper thinks that this is the tipping point that will push all the players in the system to sit down and agree a way that will lead to their survival.
But given what he believes, Brian has 3 questions
1. What changes must we make to overcome these problems?2. How do we overcome the special interest gridlock?3. How do we avoid working on the wrong things? (e.g. working on the uninsured rather than the underlying costs that cause uninsurance–although again I think this is the wrong way around).
Brian believes that the only common ground is to get people to act for survival for the sake of their own self-interest. So the crisis has to be very, very visible. He thinks it will be and that all players (including suppliers, physicians and employers) will look for a neutral ground to solve the problem.
How is CPHR going to solve this?They have 3 major principles1) Retool American Healthcare enterprise with standardized management tools, such as–compatible IT platforms–transparency in performance accountability–evidence-based medicine–evidence-based management–pre-market national technology assessment–changes in reimbursement to move to P4P–process changes throughout system
2) Establish a national floor of basic coverage that everyone will get
3) Fix health care liability (but that must include quality and error prevention)
5 phases to the CPHR plana) Show that the system is unsustainableb) Establish a neutral coalition platformc) Outreach and mobilizationd) Develop content and consensus on actione) Coordinate the content through policy adjustment
Brian believes that they’ve achieved 1 and 2. I’m by no means sure, but the effort is worth watching and supporting, faute de mieux.
After this talk there was an interesting conversation among the audience about how long the system can sustain now. I think it can go on for a long while in this mess, but in the room 3-5 years seems to be the consensus. Brian thinks that he can get changes made within that time by setting the right folks up in a political environment where they’ll overcome their opposition. That’s why I think he’s an optimist. I don’t see any initiatives on Capitol Hill that will address any of these problems quickly. Perhaps the CPHR might create some.
