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POLITICS: Beyond belief!

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HastertI used to have a joke game called the “who’s Denny Hastert” game. Essentially none of my college educated friends in San Francisco and Silicon Valley knew who he was despite the fact that he was Speaker of the House of Representatives, and third in line to the Presidency. I played the game one Christmas (I think it was 2001) at a friend’s house where there were a dozen people, including VCs, managers of big companies, etc, etc. None of them knew (although one guy thought that a San Francisco woman was speaker of the House, and he might be right in a few weeks!). I thought then the country was screwed in terms of basic civic literacy (don’t forget I’m a damn immigrant!)

But this is a little more serious. Can You Tell a Sunni From a Shiite? Apparently not if you’re a senior member of Congress with an intelligence responsibility or the guy in the FBI responsible for counter-terrorism. My mind absolutely boggles.

POLICY: Spine surgery

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I finally got to the article on spine surgery in USA Today. Exactly what you’d expect. Massive practice variation all over the place—although to be fair we’re not exactly sure that too much is bad here, as no one has a clue how to make back pain go away. (Unlike lots of other types of interventions, as Eric Novack will tell us). But there’s a killer quote from Mark Chassin at Mt Sinai.

“The U.S. health system does a great job in developing new and innovative treatments, but it does not do a good job in thoroughly and rapidly evaluating those innovations to find out when they work and when they don’t,” he says

PHARMA/POLICY: McLellan leaves offices with partisan and incorrect remarks about Part D

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Someone should tell Mark McClellan that he was generally respected by everyone and that now that he doesn’t work for the White House there’s no need to become a Republican shill. But that’s what he’s doing by saying that Medicare drug costs are going down. There are two basic porkies in the statement. The first is that the cost he’s comparing it to is the inflated projection that was come up with well after the MMA was passed–not what Congress was told it was going to be. (I’ve written about how that number changed plenty before, but suffice it to say if you change it up enough and then it comes in lower, that’s not "savings"). If his optimism is correct, we’re back near the original projection, which was still way more than a proper drug benefit should have cost, and was based on more people being covered.

Second, claiming that premiums for seniors in Part D have gone down is not true, as Pete Stark’s office pointed out. Premiums have gone down on average only if you count Medicare HMO/Advantage premiums with those for Part D standalone plans. Medicare Part D standalone premiums have in many cases gone up. Joining a Medicare HMO is a much different thing than adding a Part D standalone plan–just ask anyone who was kicked out of their Medicare HMO in the late 1990s. And of course the HMOs were given a huge subsidy in the MMA legislation separate from the drug coverage part of the legislation, and that’s the money that they are using to reduce their premiums. And we’ve seen this movie before too, including the part when the subsidy is reduced and the private HMOs give up. Just ask anyone who was kicked out of their Medicare HMO in the late 1990s

By the way, you can tell what McClellan is saying here is a lie because Karen Ignagni agrees with him! No need to bother actually researching it, she’s that good a barometer of avoiding the truth! Here’s her quote, if you care:

"There’s no doubt that Medicare is providing valuable benefits for
seniors, and costs are far less than what was expected at the time
legislation passed" creating the new drug benefit, Ignagni says.

Finally, where did Medicare Part D really fall down on the job? It was in failing to enroll low income seniors who would actually have benefited from it. That’s because it was a confusing "market-driven" voluntary program, not a compulsory extension of traditional Medicare. And are low income seniors able to make sensible "market-driven" choices? Apparently not!

NEW YORK, Oct. 13 (UPI) — U.S. seniors with low incomes or no
prescription coverage are less likely to use generic cardiovascular
drugs than more affluent seniors, a study finds. Researchers at
the Mount Sinai School of Medicine in New York say that seniors with
low incomes or no prescription coverage were less likely to use generic
cardiovascular drugs than more affluent seniors and those with
prescription-drug coverage.The study, published in The American
Journal of Managed Care, is the first nationally representative study
that examines the association of income and prescription drug coverage
with generic medication use by Medicare beneficiaries, according to
lead author Dr. Alex D. Federman. Federman and colleagues
examined generic cardiovascular drug use in a nationally representative
sample of elderly Medicare beneficiaries with hypertension. The
findings showed that older patients with cardiovascular diseases often
used costly brand name drugs when equivalent but lower cost generic
versions are available. "The patients that we were concerned
about are low-income and underinsured seniors," said Federman. "Our
findings show this group in-particular are missing opportunities to
save money on prescription drugs without sacrificing quality of care."

But if we had put all seniors into a guaranteed drug benefit program that ensured that they got the best pricing on all drugs (a la VA) and actively managed them so that they were given generics where relevant, then both they and the taxpayer would have been better off. And don’t even start me on the subject of how much the whole benefit would have cost the taxpayer if it had been designed sensibly rather than by PhRMA and AHIP.

I just hope that now he’s out of the Administration McClellan can go back to realizing that there are many shades of gray.

POLICY/HOSPITALS: New Orleans health care, not rebounding

This is long but well worth a read. Modern Healthcare ran a roundtable on health care in New Orleans post Katrina with 2 health care execs and 2 consultants who did a study on the state of play.  Essentially because the Oschner clinic was on slightly higher ground than the rest of the city, and stayed open, it’s had its financial ass handed to it on a plate. And  despite the $90 billion rescue package (or whatever it was) no one is helping. It’s basically having to suck up the loss. And is the city ready for another hurricane? No prizes for guessing the answer.

 

POLICY: Why Is Fixing American Health Care So Difficult?

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Das KapitalABC News is running a special on health care this week and they asked two bloggers to stick in our 2c.  I’m up asking Why Is Fixing American Health Care So Difficult? David Williams from The Health Business Blog pens an article about IT and transparency that is slightly more optimistic.

Feel free to come back here and comment.

Almost all the problems with the American
health care system boil down to two questions. How do we create a
system that ensures that all citizens, and perhaps residents, have
access to health insurance? And how do we contain the huge cost
increases?

Of course, behind these questions lies the question of how to reform
the nation’s largest industry that serves and richly rewards many
powerful interests. Continue.

HEALTH PLANS: Wellpoint and United — not much to be proud of…(with 12 noon EST UPDATE)

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It is getting pretty difficult to find something nice to say about the nation’s two largest health plans. Wellpoint’s Blue Cross of California unit, already fined by the fairly tame CA Dept. of Managed Healthcare, is now being sued by California hospitals for what appears to be a general systematic cancellation of high-cost member policies. It’s worth noting that they don’t seem to be investigating the applications of those members who didn’t make any claims. Lisa Girion, on her way to health care journalistic stardom at the LA Times has more:

A class-action lawsuit filed Friday on behalf of all California hospitals accused Blue Cross of California of routinely violating state law by refusing to pay hundreds of hospitals statewide for patient care it authorized.The suit is the latest salvo in a growing controversy over actions by Blue Cross to cancel the individual health insurance of sick policyholders, sometimes saddling canceled patients with huge medical bills. Although Blue Cross contends that the cancellations are justified partly to crack down on fraud, consumer advocates and policyholders say some revocations are carried out simply as a way for Blue Cross to avoid paying expensive claims.

Larry Glasscock, the CEO of Anthem, (now Wellpoint) has been pretty quiet in the press, but Wellpoint’s pre-merger figurehead Len Schaeffer has historically not been–and it’s his side of the company that evidently was causing all the trouble. In fact as I’ve pointed out here before, although Schaeffer accurately understands what the problems in health care are (practice variation and a lack of IT use) the solutions he used over the years don’t solve those problems, but instead relied on better risk selection and more aggressive pricing to make Wellpoint very profitable. What exactly was his "value-add" to society for all that money he "earned".

for whom the bill tolls

But of course in the lexicon of earners he’s a chump compared to Bill McGuire at UnitedHealth Group. It does appear though that McGuire may be fired by Monday as an external investigation suggests that the stock options he received were all illegally backdated. Whether or not it was illegal, his actions suggest staggering greed. He already had wealth beyond anyone’s imagination. What exactly was the point in cooking the books and effectively stealing from shareholders to add more?

I guess with the amount of sycophants he surrounded himself with, like these ones quote in the WSJ he really felt he was worth every penny of the $1.6 billion, or whatever:

"We’re so lucky to have Bill," Ms. Mundinger, a longtime
compensation-committee member, told the Journal earlier this year. Of his rising
pay, she said: "He needs to be compensated appropriately so that his business
model has believability in the market."

It wouldn’t be quite so bad if the bulk of these profits and vast riches were made back in the 1990s. At least then health plans were acting as what Uwe Reinhardt used to call "bounty hunters" and saw their mission as removing the excess earnings of hospitals and specialists, even if they were redirecting some of them to their executives. But at least Malik Hassan (Healthnet) and Len Abramson (US Healthcare) were clearly going after the providers and were delivering lower rates of premium growth (and in some years negative growth) to their customers, the big employers.

But in the past six to seven years, that has all changed. The health insurers have completely given up trying to figure out how to lower costs, and have just stuck big increases onto their customers. What’s worse is that as overall premiums and costs have gone up, the share that the insurers have kept has increased! Thus, they are screwing their customers, and at the same time keeping a bigger share of larger revenues–which has resulted in those huge profits and stock option gains.

And even worse, they’ve all got heavily into the business of destroying what was left of the risk pool by providing high-deductible highly underwritten plans such as Tonik (Wellpoint), or even worse buying scumbag quasi-fraudulent plans such as Rooney’s Golden Rule (United).

I know that the employers and taxpayers are dumb, but that doesn’t mean it’s been a good thing for McGuire, Schaeffer et al to take advantage of them.

There are obviously talented and good people working in many parts of health plans, as I’ve documented elsewhere. Several major innovations have come from within them, particularly in population and disease management. But recently the people in the executive suites have shamed their organizations and harmed not only their industry, but the health care system and society as a whole.

And, eventually, that will mean that when time comes to make an argument in favor of why we should have a private sector health care insurance industry, the rational moderate voices in support of some role for health insurance intermediaries–of whom barely count myself as one– will be that much weaker.

UPDATE: McGuire is indeed gone. What happens to his $1.6bn of in the money vested options is less clear. Wall Street doesn’t seem to care–the stock is flat today.

POLITICS/PHARMA: Bush Aides Called Evangelicals ‘Nuts’

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TfApparently Karl Rove and friends think that the religious right is nuts

A new book by a former White House official says that President Bush’s top political advisors privately ridiculed evangelical supporters as "nuts" and "goofy" while embracing them in public and using their votes to help win elections. The former official also writes that the White House office of faith-based initiatives, which Bush promoted as a nonpolitical effort to support religious social-service organizations, was told to host pre-election events designed to mobilize religious voters who would most likely favor Republican candidates. The assertions by David Kuo, a top official in the faith-based initiatives program, have rattled Republican strategists already struggling to persuade evangelical voters to turn out this fall for the GOP.

I can’t say that I disagree with them. But if the sophisticated Bushie’s are merely using the religious right to win elections and otherwise ignore them when they govern—as many on the religious right have said—why did they have to give them control over the FDA and other allegedly “neutral” agencies that regulate science in the process?

TECH: Stents and the lack of technology assessment in action

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CabgNewer Stents Pose Dangers, 2 Doctors Say. That would be the drug eluting stents, now racking up a $6bn odd in US revenue for their manufacturers.

Well what did you expect? Oh, and by the way, still no evidence that stents are better than CABGs for the payer or the patient, in fact it’s still probably the other way around —as THCB has been saying for a while. But don’t expect much to change. After all you need more than evidence to stop this ball rolling downhill.

For example, I met someone with a new and better drug-eluting stent (from ex-BSX but now with Abbott) only last week, so if we decide that Cypher and Taxus aren’t the best answer, I’m sure the real answer will be something new—not something old.

 

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