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POLICY/THE INDUSTRY/HEALTH PLANS: Employers trying to be not so dumb

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This is definitely one to watch. With help from THCB buddy Brian Klepper, the employers in Reno are interested in becoming smarter purchasers, and they held a forum without letting any plans or providers in the room. The results suggest that they’re pretty serious about pooling their data instituting P4P & transparency, and basically doing what their health plans should but don’t do. The employers account for about 25% of the population in northern Nevada.

All employer groups have had this clout potentially. None of them have ever used it. And usually they’ve been too chummy with the delivery system or have been bamboozeld by their “agents” the health plans and PBMs. It’s possible that in some places the worm is turning.

PHARMA/POLICY/POLITICS: More rational behavior from big Pharma

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Exactly as happened in 2000, and 2002 a late surge of money is coming to help Republicans from the PACs of New Jersey’s finest.

According to a report published Wednesday in the Wall Street Journal, drug-industry dollars are helping to fuel the campaigns of Republican candidates like embattled incumbent Sen. Rick Santorum, R-Pa., who faces a tight race against Democratic challenger Bob Casey Jr., who calls the Part D program a “giveaway to Big Pharma.” The Santorum re-election bid has drawn $454,500 in contributions from pharmaceutical companies, WSJ said.Part D has drawn fire from Democrats in congressional races in part because it doesn’t permit the federal government to negotiate with drug companies on drug prices, and Democratic challengers have vowed to change that if elected, the report said.

While the concept of science-based companies backing Rick Santorum (the one who took his stillborn child home to meet his kids, and thinks that the earth is 6,000 years old) may be odd, it’s completely rational. Essentially now that there is a Medicare drug benefit, eventually price controls will be introduced. It’s in Pharma’s interest to delay that day as long as possible. Anyone can see that including big Pharma, who as Joe Paduda reminds us have seen profits rise with their volume now that Part D has cut in

However, it therefore exposes the whole McClellan/Ignagni line about how the private market in Medicare Part D has lowered drug costs more than direct negotiations would have done for the lie it is. After all, if Part D as written is so much worse for big Pharma than government negotiations/price controls, why would they be fighting so hard to protect it?

POLICY/POLITICS: Uwe gets a job

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Apparently New Jersey is going to rationalize its health care system. Well at least they put the best guy in charge.

New Jersey Governor Jon Corzine has announced that Uwe Reinhardt, the Woodrow Wilson School’s James Madison Professor of Political Economy and an authority on health care economics, will head the New Jersey Commission on Rationalizing Health Care Resources. According to an official announcement from the governor’s office, the Commission is charged with ensuring that New Jersey’s supply of hospital and other health care services is best configured to appropriately respond to community needs for high-quality, affordable and accessible care. In addition, the Commission will ensure that there is proper oversight and accountability of limited public funds.

This is of course the state of which the biggest AMC was run by a bunch of crooks and is now having another big academic name, Bruce Vladeck, oversee its rehabilitation. I’m not sure how much Uwe will like it out there in the real world, but I’m sure that the Commission won’t have much power,and I look forward to what it’s going to say!

PODCAST/POLICY: A frank exchange of views with David Gratzer

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So I tried really hard to be nasty to David Gratzer. I’ve complained bitterly on THCB about his op-ed posts which I think just misrepresent Canadian and American health care, and I still think that his book The Cure misrepresents both the prospects of his solutions fixing the US mess, and the desire of foreigners to implement US-style solutions. But as I was interviewing him, he was just so nice and reasonable!

That is not to say that we agreed on virtually anything. Listen to the pod-cast.
It’s long but you’ll enjoy it. (Transcript is up here)

TECH: ePrescribing update

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I wrote a brief piece for the newly renamed Digital Healthcare and Productivity on ePrescribing. Don’t get too carried away by the headline in the piece—I did know about Surescripts before this week! But while the dog-food has now been put into a can with an easy release top (eRx apps connected to pharmacies), it’s still not clear how fast the dogs are going to eat it.

Those of you in the tech world might want to come back here to comment.

In the late 1990s several companies promised to
bring handheld ePrescribing to America’s physicians. ePrescribing was
supposed to improve efficiency for doctors, particularly by reducing
calls from pharmacies to their offices. But most savings from
ePrescribing go to pharmacies, whose employees spend less time entering
data, and to health plans because ePrescribing helps increases generic
substitution. In addition, many early systems ended up generating a fax
from office to pharmacy becausethere was no easy way to transmit those
prescriptions electronically. Continue …

POLICY: We need health cost containment before fixing the payment method , by Jack Lohman

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Das Kapital

Jack Lohman is a retired business owner from Wisconsin and founder of Throw the Rascals Out. He’s become a frequent commenter on THCB, oddly enough as a Republican voter who is in favor of single payer, and I thought that his opinions on health care were interesting enough to merit an opinion piece no the main page. Jack can be reached at jl*****@****pc.com.

MikeGUEST POST

Let’s take a time out.

As the nation struggles with how to pay for health care costs that are spiraling at an annual rate of 17%, five times the rate of inflation, we are virtually ignoring the reasons behind the escalating costs in the first place. We are engrossed in payment methods rather than cost containment, all while the industry seeks innovative ways of taking home a bigger piece of the national pie. Some see the “free-market” as our savior, when in fact, the slow conversion to a free market system that began a decade ago is the reason we are in trouble today. And it will get worse.

Years ago it was considered fraudulent for hospitals to hire their own physicians, for physicians to own an interest in a hospital to which they referred patients, and for physicians to refer patients to an outside laboratory in which they had a financial interest. We also had a certificate of need program that prohibited hospitals from leap-frogging the hospital down the street, thus churning expensive high-tech imaging systems. 

Continue reading…

PHARMA (well sort of): Jim Edwards having a little too much fun

800x600Jim Edwards of Brandweek has been writing about “Bob” the (fictional) recipient of the Enzyte male enhancement pill (John Mack likes Bob too!). As you might have guessed, the pills a crock and the company behind it is a bunch of fraudsters. One hopes this isn’t true of prescription ED drugs. It may not exactly be as insightful as his normally extremely aggressive investigative reporting, but on the other hand Jim may have produced one of the corniest headlines of the year:

Enzyte Executives Stay Firm Despite Growing Troubles

PHARMA/POLICY: Price negotiations coming?

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Joe Paduda is puzzled that drug company prices and profits are going up, yet the NY Times thinks that we can’t get a better deal on drug prices for Medicare. But in some ways that’s a little irrelevant, as the introduction of price negotiations are a political not an economic question. And despite the fact that in 2003 negotiations were politically unacceptable to Tom Delay et al, it appears that (as quoted in Krugman’s column today), the politics of negotiation are all one way.

This is clear from the latest Newsweek poll, which shows overwhelming public support for the agenda Nancy Pelosi has laid out for her first 100 hours if she becomes House speaker. The strongest support is for her plan to have Medicare negotiate with drug companies for lower prices, which is supported by 74 percent of Americans — and by 70 percent of Republicans!

Even assuming that the Dems don’t fumble their current advantage away (or more accurately that the Republicans don’t keep shooting themselves in the foot and the knees) and they take the House and Senate, we’re not getting negotiations tomorrow. First, it might not get past the Senate filibuster, although those poll numbers are pretty scary for Republicans and will take a boatload of PhRMA cash to overcome. Second, Bush will likely veto it, as the current MMA is basically what passes for his domestic legacy (unless he wants “I cut taxes for the richest people in the world and made the children of the middle class pay for it” on his tombstone).

But in any event Pharma needs to prepare for a world in which Medicare drug price “negotiations” are much more likely than they’ve expected heretofore.

TECH: Avatars, and the Metaverse

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I have been struggling with the new attention on online virtual worlds like Second Life, World of Warcraft, etc, etc. I think that there’s something here that’s more than games. But I can’t quite tell what yet. And if it’s just games, well I don’t want to get sucked into this, as I waste enough time on the Internet already.

Here’s an article by a tech veteran suggesting that this is The Next Big Thing. The question is, what moves to virtual worlds? If it’s just games, then it’s self limiting as only some people have that much time on their hands and they’re not the ones with the money. There are obviously options for moving community online to virtual worlds, but community per se doesn’t have that much economic value. However in some aspects of health care, like patient groups, there is real value from community.

The web though is most important for moving commerce and information online. It’s not clear to me how you put that into a virtual world, other than advertising to those who are playing games or otherwise spending time there which is the TV/newspaper model. Any ideas?

(Note: Slight edits made to clarify)

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