THCB

Categories

Above the Fold

PHARMA: That can’t have been a fun management call, with UPDATE

• 4

Pfizer’s next big drug for heart disease (torcetrapib which was slated to replace Lipitor) has bombed in trials, causing sufficient deaths that the trials have been ended early and development has been stopped. This is obviously dreadful news for Pfizer, and I assume that the stock will be well done on Monday. But that’s how the pharma business is supposed to work—big bets on new blockbusters may not pan out, but others will do so.

But beyond that it is also a pointer that some of the easy “targets” such as heart disease and diabetes may be nearing their natural limits for medication therapy, and that lifestyle changes, the old “diet and exercise” may really be the best way to deal with them—allied of course with the generics which were the blockbusters of yesteryear. Almost all the growth in the drug business in the last few years seems to be in niche and very expensive biologics for virtually orphan diseases.

Which all means that the cuts in the sales-force that Pfizer announced last week are likely to be the first of many. Big Pharma is going to have to figure out how to get to a model beyond hitting every doctor and every patient on behalf of a few big blockbusters. The challenge for the rest of the system is to figure out how to use both the new niche drugs and the old blockbusters in the most effective manner.

UPDATE: Pfizer stock is off 12% in relatively early going, down to $23 and change. Ouch! Although it’s still above the lows of a year ago (Just). If you are a bitter shareholder this morning, you should thank the lobbying dollars sunk into Part D’s passage in 2003 for the industry profit recovery that’s kept it afloat this far in 2006. You should also worry about what comes next on that score!

HEALTH PLANS/POLICY: John Igleheart is a pussy

• 3

Lg_2
In a Conversation With Larry C. Glasscock, the CEO of Wellpoint, John  Igleheart has either been massively restricted by Glasscock’s PR handlers or has revealed himself to be a complete pussy.

A little history: having been a senior exec at CareFirst (Blues of DC), Glasscock took over the fast growing regional Blues plans based around Anthem BCBS in Indiana, took them for-profit and made himself a fortune. A great American success story.

He then merged Anthem with the big other for-profit Blues agglomeration, Wellpoint which was run by Len Schaeffer, in 2005. I’ve had a fair bit to say about the variance between Len Schaeffer’s high-fallooting rhetoric and the actual on the ground performance of his company. Glasscock appears no better. And in many ways, he’s been much worse.

I’m not saying that Igleheart should necessarily have gone after him for the fact alone that he made $25m last year (not to mention the millions more in stock)—after all Wellpoint stock has done very well. But given that certain other health plan CEOs are in some hot water for their outright greed and fraudulent behavior, it might just have come up.

Continue reading…

POLITICS/TECH: Fame and fortune and everythingthat goes with it

Today, (Monday) I’ll be on local NPR in San Francisco talking about what the Democrats may (or more likely, may not) do about health care in the new Congress. It’s on the Your Call show on 91.7 KALW at 10am and yes it has the politics you’d expect of a San Francisco NPR station, so I’ll be the right winger on the show! You can tune in or listen here.

And on Tuesday I’ll be talking at the Northern California Chapter of HIMSS in San Ramon about the PHR. It’s a good line-up and I’ll be reporting back on the smell of sulphur!

POLICY/HEALTH PLANS: Yet more debatable data on CDHPs

• 4

HSC’s John Gabel (kind of a “neutral” in the debate) is out with a new study suggesting something that I think is true. The take up of CDHPs by workers offered them in a choice with other products (HMOs. PPOs) is slow. And that’s because they’re not being appropriately compensated with premium reductions in their take-home pay to off-set the much higher-deductibles.

And of course this goes back to how employees buy their health care in the first place—mostly unconsciously via their employers, not knowing the actual cost of their premiums. If you want a long lecture on why this makes employees poor purchasers of insurance, attend any Alain Enthoven Stanford Business School class.

The likely evolution of all this is that workers will find the deductibles and co-pays for their PPO and HMO products increasing to the level of the HDHPs pretty soon. That’s how employers will “get out” of health care benefits—until the possible day when they all look at each other and say “OK let’s drop them totally and let the government take over.” Which is what they all want, but no one is quite ready to make the first move.

But because the HDHP is becoming an evolution of the PPO product that already exists, the argument will about choice will soon be moot. Karen Ignagni may well say that all (or actually 30%) the new small employer HDHP buyers were uninsured, but it’s pretty obvious that most (70%) of the new HDHP wielding employees were people with PPOs before who are being forced into HDHPs by their employers. And that’s certainly what’s happening with Intel and other larger employers who are “offering” HDHPs.

However this news release is most remarkable for this quote from Ignagni: “Ignagni said the plans are popular in certain niches but that it was too soon to say if they will gain wide acceptance.” She’s actually telling the truth! Mark that one down in your diary.

POLICY/POLITICS/HEALTH PLANS: A Stark future for private health plans in Medicare?

• 2

Here’s the SF Chronicle on Pete Stark’s opinion about Medicare Advantage

Boiled down, Stark’s contention — based on a new Commonwealth Fund foundation study — is that the private firms are being paid 12.4 percent more per patient than government-run Medicare to provide the same level of services. In 2005, Medicare Advantage plans, originally created based on the contention that private industry could provide service for less than the government, were overpaid an average of $922 per enrollee, for a total cost to taxpayers of $5.2 billion.The payments “are not a mistake,” Stark charged. “Republicans are overpaying Medicare HMOs as part of a deliberate effort to shift beneficiaries into private plans. The Republicans’ ultimate goal is the privatization of Medicare, complete with a voucher system that leaves seniors to fend for themselves,” he added.The industry questioned the methodology of the study Stark used to make his charge and said that Medicare Advantage plans actually save money by injecting competition into the Medicare system, which covers about 43 million Americans. Figures from the America’s Health Insurance Plans trade group estimate that Medicare Advantage participants save on average $82 a month, compared to what they would pay in the traditional Medicare program. That comes to total savings of more than $6.8 billion annually, the group estimates.

And like the good politicians they are AHIP just changes the subject (See the release for a typical piece of Karen Ignagni’s tenuous relationship with the truth)..

Err, guys, it’s not whether the enrolled seniors are paying less in deductibles and co-pays that Stark is worried about. He knows that the private plans are cross-subsidizing those beneficiary costs (along with gym memberships et al) from the vast profits they’re making on them. It’s the taxpayer who’s paying more, as way too many GAO reports have shown (and now the somewhat more biased but no less true Commonwealth Fund report shows).

So the key question that the private plans need to be focusing on, especially as they are staring risk adjustment in the face anyway is, can they genuinely save money over the FFS on a non-risk selection basis by improving the efficiency and quality of the care they manage? Currently as the details of the report make clear, the risk adjustment has been hidden by an overall increase in the payments, and by the double inclusion of some other technical payments, such as the indirect amounts Medicare pays for medical education.

But surely that can’t last under any scenario. Logically in the high cost states like New York and Florida, making genuine savings over Medicare FFS—given the huge unnecessary care delivered and reported on by the Dartmouth crowd—must be achievable. Those savings should include decent profits for the private plans. They shouldn’t need extra payments to make it worth their while being in the market. If the private plans cannot prove that pretty damn quick, then they need to be prepared to get out—in a replay of the early 2000s. And Stark may want some of his (our!) money back!

POLICY: For Make Benefit Glorious Nation of California By John Irvine

• 2

The first shots in the fight over California Gov. Arnold Schwarzenegger’s health care reform proposal were fired last week. The Los Angeles Times reported that a team of advisers is working to develop the proposal, which will probably be unveiled during Schwarzenegger’s state of the state address in January. The news had led to a pretty serious hoo ha.  Liberals are worried that the plan will look a lot like the helpful proposal drafted by America’s Health Insurance Plans. Conservatives, on the other hand, are concerned that Schwarzenegger could get carried away in his enthusiasm to appeal to moderate voters and end up producing something that could hurt California’s businesses.

What should we expect? The backgrounds of the advisers who are helping Schwarzenegger produce the plan may give us some hints. As it turns out, three of the four are Democrats. One recently left his position at McKesson government relations. In his piece this week, the California Health care Foundation’s George Lauer described the makeup of the team:

Richard Figueroa, former
legislative director for Insurance Commissioner John Garamendi and
former aide to former Gov. Gray Davis (D).

John
Ramey, former executive director of the Managed Risk Medical Insurance
Board, deputy secretary and assistant secretary of the Health and
Welfare Agency, and chief of staff for the Department of Health
Services. Since 2000, Ramey, a Republican, has been principal and
partner of Ramey, Macomber & Associates a Sacramento firm
specializing in health care and health insurance contracts.

Herb
Schultz, former deputy director of the state Department of Managed
Health Care, most recently vice president of government programs at
McKesson Health Solutions. Schultz also served as acting director of
the California Employment Development Department and acting secretary
and undersecretary for the Labor and Workforce Development Agency.

Daniel Zingale, chief of staff for first lady Maria Shriver and former director of the Department of Managed Health Care.

A lot of people have focused on the possibility that the plan will look a lot like the proposal produced by former Massachusetts Gov. Mitt Romney. The critics say the idea probably wouldn’t replicate well in California for many reasons. (Short explanation: California is a lot bigger than Massachusetts.)  Adopting a variant of the Romney proposal would also be a form of endorsement for Romney, who plans to run for the White House in 2008.

Continue reading…

TECH: HealthCamp

There’s a meeting called HealthCamp about Health2.0 in San Francisco on Saturday. Many of the usual suspects will be there, but I suspect there’s room for lots more. You can add yourself to the list at the wiki.

BLOGS: A great Health Wonk Review

Michael Cannon is hosting Health Wonk Review #21 up at the Cato@Liberty blog. And unlike some HWR hosters (i.e. me) Michael does a great job of not only steering you to the posts, but summarizing them and giving you his views on the legitimacy of the arguments.  And just because he’s wrong most of the time, doesn’t mean that he’s not doing a fabulous job! This is one of the best HWRs yet. (And apparently I’m James Brown!)

And if you’re not reading the Cato blog regularly you’re missing out on among other things a) some of the best argued views from free market advocates on health policy (which I usually disagree with), b) drug policy and human rights (which I’m with all the way), and c) traffic (which will at the least surprise you in a Heinlein fashion, and those ideas comes from those terrible socialists in Europe!)

QUALITY/POLICY/TECH: Quick notes from the road

• 2

Apologies to those who’ve missed me. I’ve been lost in the mid-west taking part in some scenario planning about the big picture future of health care. I can’t give you any details (at least not yet) but it did involve me spending lots of time with a bunch of business association lobbyists who’s views on health care, shall we say, the average THCB reader wouldn’t expect me to share.

In the informal conversations, across the board there was, however, one huge topic of agreement amongst the boomers I met. They wanted themselves and their parents to die at home with palliative care; they felt that current end of life care verges not only on the irrational in terms of resource use, but also on the inhumane. And they think that within a decade, we will be having that conversation and forcing that set of opinions onto our medical providers. Who presumably will be rather more willing to hear us out, rather than insisting on engaging in those heroic measures that, the group felt, todays providers feel they must perform.

One other quick thing. Wednesday, Intel, BP and WalMart announced a PHR initiative, which I believe is being largely led by JD Klienke’s group in Oregon. On that topic I’m giving a talk to HIMSS N.California in San Ramon on Tuesday on the topic of PHRs. Also talking will be Kate Christensen from Kaiser Permanente, and Holly Miller from the Cleveland Clinic. I personally think this should be an interesting opportunity to hear a range of views and understand some developments in major PHR deployments from providers (and of course I’ll be witty and brilliant, just as soon as I’ve put my talk together). But apparently according to at least one other blogger, I’ve misunderstood it all, and really I’m just being a PR flack for the devil worshipers at KP central. I’ll report back as to whether the place still smells of sulphur.

 

POLICY: New York Trans Fat Debate Heats Up

• 3

The Wall Street Journal reports that McDonalds and other
fast food businesses are engaged in a last minute drive to convince health
officials in New York City to “soften” the proposed ban on trans fats in restaurants
in the five boroughs. According to the Journal, McLobbyists have approached city council member Peter Vallone and asked him to sponsor a competing measure
that would give the industry more time to make the switch over to healthier
cooking oils. Quoting from WSJ’er Janet Adamy’s piece:

The city’s board of health is scheduled to vote Tuesday on
whether to force city restaurants, from fast-food outlets to servers of haute
cuisine, to eventually remove all but a trace of artery-clogging trans fat from
the food they cook. It’s not certain yet how the board will vote, but people
following the process say the board appears likely to approve the measure.

A New York City ban would place the most significant
restrictions yet on trans fat in the U.S. since health officials began warning
of its dangers years ago. Restaurant chains will feel pressure to more quickly
replace oils in their outlets across the country, since the companies get the
most efficiency and consistency by cooking with a single recipe. Other cities
probably would follow New York.

          — John Irvine

assetto corsa mods