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The Perpetual Health Care Crisis By Jeff Goldsmith

• 20

I began teaching health policy almost thirty years ago with Odin Anderson at the University of Chicago
Graduate School of Business. Like me, Odin was a sociologist, and one
of his hobbies was tracking the sociology of our nation’s “healthcare
crisis”.  He found that the health care “crisis” waxed and
waned (as measured by press mentions and journal articles), but never
disappeared.   It had been going on for twenty years by then,
so I guess we’ve now been in “crisis” for fifty years.  The
American health care “crisis” is not acute illness – rather it is
like a chronic disease which flares up periodically, accompanied by
fresh prophecies of impending doom and calls for someone on a white
horse to fix the problem.

From 1970 to 1993, health costs
roughly doubled as a percentage of GDP. All the way along, prophets
of doom  forecast that the country would simply fall apart when
health costs exceeded 8%, then 10%, etc. .  Our economy somehow
continued growing and innovating, and the health system  got steadily
more capable at managing our illnesses the entire time. No-one 
I know would trade our present, very expensive health system for the
cheaper one we had in 1965 or 1980. 

Then, during the mid- 1990’s,
a remarkable thing happened.  For the first time since people began
tracking the statistic, health costs remained dead flat as a % of GDP
for eight years in a row.  It is remarkable how little attention
this flattening got from the “crisis” mongers.  When we finally
get this year’s spending numbers from the CMS Actuary, my forecast
is thathHealth costs will have been flat as a percentage of GDP for
the past five years if you include 2007.  Five years isn’t “momentary”,
as Brian Klepper characterized this latest pause.

Continue reading…

Bogle on the Financial Sector’s Threat to Democracy – Brian Klepper

• 9

Some years back I was mortified to realize that it would be all-but-impossible to fix health care without first fixing America’s patronage system, that puts virtually all policy up for sale to the highest bidder. In 2006, American corporations spent $2.5 billion lobbying Congress, nearly $5 million per Senator and Congressional representative. More than $350 million of that figure came from the health care sector, and half of that ($180 million) came came from the drug, device and supply industries. All this information is handily cataloged at the excellent site, www.opensecrets.org.

A couple weeks ago I published a letter in the New York Times – yes, I was astounded too – arguing that we won’t have health care reform until the leaders of the non-health care business community come together and roll over the health care industry.

Now, the always astute Greg Pawelski brought my attention to a superb Bill Moyers presentation, describing a parallel problem. America’s financial sector leverages its strength to take huge amounts of capital out of the system, without providing much in the way of value. The message is delivered by John Bogle, who created The Vanguard Group. Here’s the background:John Bogle, 77, created The Vanguard Group, Inc., in 1974, which today
is one of the two largest mutual fund organizations in the world, and
was was the first index mutual fund. He retired as Chairman and Chief
Executive Officer of the fund in 1996, yet remained Senior Chairman
until 2000.

Bogle explains the broader implications of The Carlyle Group’s buyout of Manor Care Nursing Homes. More and more, Wall Street is taking control of corporations, making Main Street pay the price, and making health care less attainable. The financial sector – banks, money managers, insurance companies, and certainly annuity providers – takes $560 billion a year out of society. They all subtract value from the economy.

Read Mr. Bogle’s recent article in DAEDALUS, "Democracy in Corporate America."

Take the time to watch this worthwhile piece and possibly to read Mr. Bogle’s lucid article. All the stuff we talk about on this and related sites are moot unless we understand and ultimately address these deep cancers on our system.

Keen Observations Department – Klepper

"Managed care plans earn higher margins today than they ever have before, and operate at lower medical loss ratios than at any time in their history….There are a lot of reasons for this, like enrollment growth, new products and acquisitions, but the bottom line is that isn’t exactly a sympathy-inducing state of affairs."

CIBC World Markets analyst Carl McDonald tells AIS’s Health Plan Week

Health 2.1 By Esther Dyson

Of all the participants at Health 2.0, Esther Dyson may be the best known outside the world of healthcare.  Esther was one of the earliest backers of Health 2.0 and it is far from an exaggeration to say that the conference would not have been possible without her support and encouragement. Together with Steve Brown of Health Hero, David Kibbe of AAFP, Lee Shapiro of Allscripts, Jay Silverstein of Revolution Health and CommerceNet’s Marty Tenenbaum, she anchored the day’s closing reactor panel: "Health 2.0: Looking Ahead."  Today she offers her reactions to what she saw and experienced on September 20th. This post first appeared on Esther’s blog at the Huffington Post, from where it has been repotted, as Esther might put it. 

Last week I participated in Matthew Holt’s and Indu Subaiya’s Health 2.0 conference,
which attracted more than twice the number of people they had
anticipated (about 500) and left many more turned away. So, clearly,
something’s in the air.

    People
    are excited. There were two drug-interaction companies – DoubleCheckMD
    onstage and PharmaSurveyor at a booth – that allow individuals (and
    doctors) to mine huge amounts of information to assess heir own drug
    combinations. There were countless social networks, self-monitoring
    services and other harbingers of the new, user-controlled world of
    health online. [Disclosure at the end.]

    Continue reading…

    HEALTH2.0: Medgadget & Sermo–a rational analysis

    • 2

    First, a quick summary of the Sermo-Medgadget battle. A week ago Medgadget runs a post claiming that anyone using publicly available (if somewhat obscure) information can impersonate a doctor on Sermo’s site. A huge fuss breaks out. See the more than 130 comments at Xconomy here and a new article interview with Daniel Palestrant here. Medgadget’s journalist/doctors have spent a lot of effort defending themselves in comments at Xconomy and apparently on Sermo, too. And they’ve met lots of anger from Sermo users. Sermo employees (Sermo’s CEO Daniel Palestrant has told me and others) are not posting on this topic on Sermo or elsewhere. They must be pretty pleased about the loyalty they’re seeing from their members—who remind me a little of Mac users decrying Bill Gates!

    Most recently, Medgadget went further. Turning up an old PDF and claiming that Sermo is turning over physicians’ identities to its clients—who are financial institutions, the FDA, AMA and (at some point in the future) pharma companies. To Medgadget’s credit they printed a clarifying comment from Sermo’s CEO which made it clear that this was a mock up and no such information had been passed on to clients.

    Next my disclaimer: Sermo is a sponsor of the Health2.0 Conference of which I am a co-founder and co-owner. Sermo has bought at least one job ad on THCB and its CEO Daniel Palestrant is someone I like and who has bought me dinner on at least one occasion. I also have a guest pass to look into (but not post on) Sermo, which I haven’t used in several months. (I like docs, I just don’t care that much what they think!)

    On the other hand, three other physician social networking sites (Within3, iMedExchange & PeerClip) were also sponsors of Health2.0, so if Sermo was to go away, it’s unlikely either that physician social networking will end, or that it’ll be the reason for the conference’s demise or my return to the gutter. I don’t own stock in any of those companies.

    Finally, I met Michael Ostrovsky from Medgadget at the party at Health2.0, which by the way he gate-crashed as despite being a top investigative journalist he was unaware until the last minute that a well publicized 450 person conference on a topic directly concerning him was happening in his backyard! He was enjoying a drink paid for in part by Sermo. I haven’t seen his check for $7 yet, but let’s assume that he hasn’t been been financially swayed in their favor by their generosity either!

    So let’s look a little at what happened.

    Sermo built its community by asking for information that had a relatively low threshold for an MD to provide, but wouldn’t easily be known by a casual web surfer. As is typical for an online community. Sermo says that as it’s grown in numbers it’s added more features to check that doctors are who they say they are, and some of them are not revealed by the original Medgadget article. But of course any security feature can be got around with someone with enough time, patience and money. And any site of any kind has to balance security/authenticity features, with ease of use and cost of access. Sermo could do a full military/FBI clearance background check on every new member (a bit like the AthenaHealth employment interview!!)—it could just let anyone sign up and promise they’re a doctor with no checking. What they are going to do is be somewhere in the middle. The question is in balancing access and authenticity, where is the rational place for them to be?

    So let’s look at situation rationally.

    Continue reading…

    Goldsmith’s Wisdom By Brian Klepper

    • 14

    Last week, Jeff Goldsmith, who enjoys a reputation as one of health care’s more thoughtful commentators and advisors, wrote a curious post on this site. He puzzled over Kaiser Family Foundation Chairman Drew Altman’s failure to gush that the 2007 health care inflation rate had moderated to 6.1%, down from 13.9% in 2003. While acknowledging that, yes, the drop in inflation is likely a low point in a larger cycle, he noted that, on an $800 billion base, the drop in premium growth freed up some $62 billion in capital for American business, funds that might be applied to better purpose.

    Jeff theorizes that

    "increased
    cost sharing has, over a number of years, compelled families to be more
    careful about their use of health services    ."

    And he points to other influences that might have contributed to cost declines, including

    "soggy admissions growth for hospitals, the
    plummeting demand for expensive heart care (and the reduction in heart
    attack admissions to hospitals), record low rates of prescription
    drug cost growth, which stem from the explosion in generic drug options    ," and declines in nursing home census [on the public financing side].

    He chides the health care community’s Chicken Littles who, presumably, live in an alternative reality, sit around hand-wringing, repeating "Ain’t it awful," but don’t get that this drop in explosive cost growth is really a sign of how many improvements there are in the system’s function. He says, as though confident that he’s dispensing wisdom,

    "Sometimes it seems like it’s the only
    game in town. If you want to see moderating health
    costs as a problem, and are creative enough, you can think of reasons
    why this is bad. And how helpful is that?"

    Continue reading…

    POLICY: The Global Evolution of Intellectual Property Rights By Bart Mongoven

    Regular THCB readers know that we are big fans of Stratfor.com, the strategic intelligence firm based in Austin Texas. While Stratfor is probably better known for their analysis of international and national security issues (Think The Economist with a wonky American accent and a healthy obsession with non-state actors and special interest groups), the firm also provides very good coverage of domestic public policy issues, keeping an eye firmly trained on Washington. Analyst Bart Mongoven, the author of the Stratfor Public Policy Intelligence Report is a personal favorite of mine. Today he writes on the evolving definition of intellectual property rights in the international arena, examining recent developments that may signal changes that could be felt everywhere from the market for consumer goods to the pharmaceutical industry. If you enjoy this piece, be sure to sign up for Stratfor’s free email report. — John

    The World Intellectual Property Organization
    (WIPO) will hold its annual meeting beginning Sept. 24, at which time
    representatives of its 184 member countries will likely endorse the so-called
    WIPO Development Agenda. WIPO rejected the ideas expressed in the Development
    Agenda just two years ago, but leading industrialized countries appear rather
    suddenly to have changed their positions. As a result, this agenda will
    reflect a fundamental change in how intellectual property rights (IPR) will
    be viewed globally in the coming decades. \u003cbr\>For the past 40 years, the\nworld's largest economies have enforced their position globally that\nintellectual property rights are sacrosanct. The 1994 World Trade\nOrganization (WTO) agreement on Trade on Intellectual Property Rights (TRIPS)\nadded some exclusions for emergencies, but in general WIPO and TRIPS rules\nhave been reflexively protective of patents and copyrights.\u003cbr\> \u003cbr\>In the\npast 10 years, however, this approach has come under increasing fire from\ngovernments in developing countries (including WIPO members), human rights\nand humanitarian groups, relief organizations and anti-capitalist groups.\nThese entities argue that the system retards the economic growth of\ndeveloping countries and even results in deaths because citizens cannot\naccess medicines and other patented life-saving technologies. Most detractors\nof the current regime argue that the absolute protection of intellectual\nproperty rights is doing far more harm than good — economically and socially\n– and some of them are calling for a radical shift that would essentially do\naway with recognition of IPR entirely. \u003cbr\> \u003cbr\>As production of goods\nbecomes more and more efficient, especially with modern industrial processes\nreaching low-wage countries such as China, goods are becoming less expensive.\nIntellectual property, on the other hand, is coming to be seen as expensive.\nWhether in drugs, music, seeds or even designer handbags, the price gap\nbetween patented products and the raw cost of the materials — that is, the\nprice of the intellectual property — is growing. With that growth,\nintellectual property rights are more frequently being abrogated. Any\ngovernment tax authority will attest that the amount of cheating is directly\nrelated to the perception that the cost of a product is unfairly high.\u003cbr\>\n\u003cbr\>Though change is afoot, the world is nowhere near doing away with\nintellectual property protection. Still, the tide has shifted the WIPO\nstance, as well as the outlook of a number of other players. Most important,\nthe fairly absolute approach to intellectual property protection looks shaky.\nThe coming regime will likely give corporations a rationale for protecting\nIPR in some cases, but not others. In doing so, it will force changes in a\nnumber of industries and business models. “,1]
    );
    //–>

    For the past 40 years, the
    world’s largest economies have enforced their position globally that
    intellectual property rights are sacrosanct. The 1994 World Trade
    Organization (WTO) agreement on Trade on Intellectual Property Rights (TRIPS)
    added some exclusions for emergencies, but in general WIPO and TRIPS rules
    have been reflexively protective of patents and copyrights.

    In the
    past 10 years, however, this approach has come under increasing fire from
    governments in developing countries (including WIPO members), human rights
    and humanitarian groups, relief organizations and anti-capitalist groups.
    These entities argue that the system retards the economic growth of
    developing countries and even results in deaths because citizens cannot
    access medicines and other patented life-saving technologies. Most detractors
    of the current regime argue that the absolute protection of intellectual
    property rights is doing far more harm than good — economically and socially
    — and some of them are calling for a radical shift that would essentially do
    away with recognition of IPR entirely.

    Continue reading…

    HEALTH2.0: David Kibbe on Health 2.0

    • 4

    David Kibbe, the doc behind the continuity of care record (CCR), and the spearhead of the AAFP’s effort to get family practitioners using EMRs, gave some great comments on the final "looking ahead" panel at Health2.0.  You can see more of David when he keynotes the Center for Information Therapy conference on October 8th in Park City Utah. Indu and I will be running a mini-Health2.0 panel at that same conference (with Revolution, Daily Strength & Organized Wisdom) on Weds 10th. But David didn’t get to say everything in San Francisco, and this is what he wanted to add:

    1) What I really, really liked was the way in which so many of these
    applications helped the patient/consumer help himself/herself — to be
    better informed, to know their options, to take better actions, to hope
    and act in their own best interests. This is exciting, and very
    necessary, as physicians in primary care are already unable to meet the
    demands upon them for care delivery, and this imbalance/shortage is
    only going to get worse in the future. And it’s exciting because
    empowerment is the key to saving the individual out-of-pocket
    spending.  As health costs continue to shift to the individual, Health
    2.0 can really be helpful.

    Healing without information is indistinguishable from magic…..And magic in health care today is unsafe and very expensive!

    We need an informed (& empowered) health nation. Health 2.0 is leading that potential.
    I won’t mention any specific examples, but all of the search engines,
    all of the social media sites, and some of the consumer tools sites are
    exciting in this regard, and quite real now. The demand for their use
    will only grow.

    2) What disappointed me was how much work the applications require of
    the patient/consumer with respect to information discovery, data entry,
    and interpretation of results/advice. There are two issues here that
    I would focus upon:

    Continue reading…

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