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POLICY/HOSPITALS/PHYSICIANS: Wennberg found wearing concrete boots at bottom of Lake Michigan

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No, not really. But Wennberg’s disciples at Dartmouth are coming out with so many uncomfortable facts for the medical-industrial complex that it’s hard to keep count. Starting by introducing the notion of practice variation 30 years ago, the group is now turbo-charging its research production, and basically all of it is bad news for anyone pretending that “American health care is the best in the world”. To paraphrase Uwe Reinhardt, how can the American healthcare not be as good as American health care?

In just the last couple of years not only has the Dartmouth crowd found that care delivered in areas with fewer doctors, and using less advanced technology, leads to better outcomes at lower costs, but they’ve also found that academic medical centers vary threefold in their efficiency of inputs (and costs) to get the same outputs, and most recently that hospital system and location is a better indicator of resource use than population acuity.

And, for the medical establishment, the news gets worse. For the last five or so years, those of us who think that we’ve already got plenty of doctors per head, as we doubled the number in medical school in the 1970s and 1980s and are still waiting for the smaller generations trained in the 1960s to retire, have been drowned out by hysteria from the medical establishment about an impending “physician shortage”. That is of course code for the taxpayer (via Medicare which funds most medical education) to support the creation of new physician residency slots, creating more specialists, who’ll then start applying more medical technology to all of us, which will contribute to more flat of the curve medicine. But I won’t give you a potted Fuchs/Enthoven class here (although you can search around plenty in THCB if you want more).

Today in Health Affairs (or you can read the potted version in Forbes), Dartmouth researcher David Goodman and his team (including Wennberg) cry bullshit on the “we need more doctors” meme. While the big academic centers which get the money from training them would love to have more residents, by examining one type of intensive medical process — caring for patients at the end of life in ICUs — Goodman et al shows pretty logically that many major academic centers use far too many physician resources. In other words we could provide equally good (or probably better) care while using many many fewer physician “inputs”. Hence overall we need fewer physicians, more efficiently used.

Of course any English surgeon, whose workloads and consequently surgical speed massively exceed those of their American counterparts, could have told you that. And my father frequently did every time he came back from a “fact-finding” trip over here. And when Goodman et al invoke the most famous name in American medicine, it’s pretty hard to argue with their conclusions:

"We have benchmarks. We have academic medical centers which are highly successful in terms of the care they provide, and we need to start looking to those places as our examples," Goodman said. "We need to study them and understand them and emulate them. The Mayo Clinic has been studied very extensively and is fairly well-understood," he continued. "We should be at a point where we can emulate some of those systems."

Mayo of course has fantastic outcomes at relatively low cost. In this study it used 8.9 physician full-time equivalents per 1,000 patients in the six months before death, while at the other end of the spectrum New York University Medical Center had 28.3. Of course the system-wide implications of all of the Dartmouth research are too awful for the medical establishment to contemplate, because they in the end mean 20 of the 28.3 doctors at NYU going away – and there are enough cab drivers in New York City as it is. And it’s not just New York city doctors that suffer when you extrapolate:

Applying the Rochester standard to the nation’s elderly, the United States has an excess of physician input; it needs 30,163 fewer FTE inputs than were allocated in 2000. Indeed, the current rate of supply growth along with excess capacity is sufficient to accommodate the 56 percent increase (in the number of elderly-MH add) predicted for 2020, with 49,917 physicians to spare.

All this research of course reminds organized medicine, and the industries that feed off its members prescribing more and more technology without caring about the cost, of something Lenin said back in 1923 about “Better fewer but better”. And you know how the American medical establishment hates them commies. On the other hand, it also invites memories similar to what Maggie Thatcher did to the British steel-workers in 1980 — she basically fired 70% of the workforce, but the amount of steel produced stayed the same. Are they going to call Maggie a commie? I think not, but you may have noticed lots of major industries taking the same approach.

So this research will stay ignored. We spend too much on high-tech medicine, we have too many specialists doing too many heroic procedures, and everyone’s very happy about that. Until that is that we notice that we have a health care system that does a shitty job of basic primary care, doesn’t cover 45 million people and costs way too much.

But if word somehow sneaks out that the two sides of that equation might per chance be related, then the pillars of the medical establishment might choose to move to other tactics. And perhaps the Dartmouth crowd might find themselves wearing concrete boots and hanging with Jimmy Hoffa instead.

CODA: And in a quick reminder that doctors are doctors whatever their
passport cover says, this article explains how spending more on health care in
Canada has not
shortened waiting times

In the five years up to 2002-03, the number of angioplasties (to open
arteries) and bypass surgeries increased 51 per cent, the number of joint
replacements rose 30 per cent, and cataract surgeries 32 per cent. But demand
for care seems to have increased just as much, and it’s not just because the
population is aging. "We’ve got way more activity beyond what the demographics
would dictate," said CIHI Chairman Graham Scott:More research is needed
to understand the phenomenon, he said but new technology is probably a factor.
If there are new tools available, such as MRIs, doctors are likely to use them.
If techniques for a certain kind of surgery improve, the procedure will become
more popular.

Duh! They don’t need more research. When the NHS was introduced in
the UK in 1948, the politicians thought that demand would fall after the initial
rush from those who hadn’t had coverage before wound down. But it didn’t. 50
years of data tells us that in health care supply creates its own demand, and
the way to deal with that is to restrict supply.

THCB: A brief word about advertising and commercialization

This blog is never going to make me a fortune, but it may be within site of at least paying for its hosting fees. So following the familiar path of starting with Google Ads and moving on, I’m delighted to feature our first sponsored link from The Health Insurance Authority, which has a ton of good information about health insurance. It’s living in the far right margin in the new section called, amazingly enough “Sponsored Links”. 

Having a sponsored link is just one of the ways that if you have a product or service to sell you can — very inexpensively — reach the nearly 1,000 talented, brilliant and healthcare-focused people who visit THCB every day. You can click here to find out more about positional, inline and other advertising.. 

And of course I’d appreciate it if those of you who do visit went and paid my sponsors’ links a visit, bought a book or generally did something that’ll help brush a few crumbs from the Internet tabe THCB’s way.

And of course if you’re a health care organization interested in an entertaining and opinionated speaker to educate or dazzle your eployees, physicians or customers, or you are in need of a consultant to help you with a strategic and/or research project, please email me.

After all I don’t write this blog just for fun.

PHARMA: Pfizer, Rost and a look at off-label marketing

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the whistleblowerPfizer has got a problem on its hands. Businessweek has had a chat with Peter Rost, the VP fired  for accusing Pfizer (and Pharmacia which it bought) of illegally off-label marketing of human growth hormone, the Pharmacia drug Genotropin, and of course for his views on reimportation (He thinks big Pharma should allow it – Big pharma opposes it).

Now in the big scheme of off-label marketing, this one is small potatoes. Big Pharma routinely violates both rules about marketing and promotion, and ends up having to pay fines or settlements on a frequent basis. Whistleblower suits abound. It’s part of the cost of doing business.

I too, have had an email "chat" with Peter Rost. He was in charge of marketing the product in question (although not in charge of sales) I asked him a few pointed questions, like did he inherit the "problem" or did it start when he was there?  And why did he keep going with the suit if Pfizer had already told the government about the problem?

Rost’s answers, which you can extract from the email trail on his lawyers web-site, are that this stuff was going on already when he got there, he pointed it out up the chain, but no one really dealt with it. He was concerned that he was potentially getting himself into trouble if Pharmacia didn’t come clean.

Meanwhile while Pfizer took over Pharmacia, Rost’s retention got messed up by the discovery that he was involved in suing his previous employer Wyeth, after which Pfizer suddenly decided that they didn’t want him. Meanwhile Rost wrote a memo blowing up the chain. Up until that point, according to Rost, Pfizer was doing the right thing but changed its tune and started pulling nasty corporate shenanigans. That included hiring a private detective to check Rost out, etc, etc.

Finally, according to Rost, Pfizer hand delivered a letter to the government (Rost called it an incomplete letter) the day before Rost formally filed his. If Rost is to be believed, he didn’t know that Pfizer was about to submit the letter and he had prepared his submission over time. In that case their timing appears just a little coincidental.

Now the government has declined to take part in the suit, meaning that they don’t think Rost’s case is that strong. Once that decision was made and the suit was uncovered, Rost was fired. Pfizer had kept him around doing nothing for a long time anyway, and hadn’t fired him because (I assume) they knew he was being a whistleblower, and there are strong laws about retaliation.

It seems to me that by piling on Rost, Pfizer has caused itself more trouble than if it had just come clean, blamed the whole thing on Fred Hassan & Pharmacia, and paid whatever it needed to to cut a deal with the  government as soon as it knew. After all it’s just part of the cost of doing business for big pharma. The whole thing is a lesson for risk management; one that you’d expect Pfizer already to have known.

Now they face a court case which at the least will leave them with some unwelcome publicity. Still better than the Feds forcing them to settle the Qui Tam….

TECH: Patent trolls and cheating in court–the Crackberry saga

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the crackberryScore one for the little guy. RIM the maker of the Blackberry caved in its patent dispute — even though things were going its way at the patent office.

Research In Motion Ltd., the maker of the BlackBerry e-mail device, Friday announced it has settled its long-running patent dispute with a small Virginia-based firm, averting a possible court-ordered shutdown of the BlackBerry system. RIM has paid NTP $612.5 million in a "full and final settlement of all claims," the companies said..The settlement ends a period of anxiety for BlackBerry users. At a hearing last week, NTP had asked a federal court in Richmond, Va., for an injunction blocking the continued use of key technologies underpinning BlackBerry’s wireless e-mail service. RIM, which is based in Waterloo, Ontario, had put away $450 million in escrow for a settlement. It will record the additional $162.5 million in its fourth-quarter results, it said.

So was NTP just a patent troll. Perhaps. There’s no question that the patent system should be fundamentally reformed, or even straight-out abolished for software.

And there are plenty of straight trolls out there who buy up old patents, or worse create nebulous ones and never ever make an attempt to make a business out of them other than suing companies who do succeed. The worst example was Jerome Lemelson who basically gouged US businesses for billions of dollars by patenting ideas he never intended to make into actual products, and then used legal subterfuge to hide the patents until someone else did actually invent the device/technology in question and then forced them to pay him off. This essentially went on till after his death in 1997, when in 2004 the courts ruled against patents he’d created in the 1950s as being valid for products invented in the 1990s. But equally worthless patent cases happen with the big guys fighting over licensing revenue, such as the long running case between Intel and TI over the integrated circuit when it was clearly a case of two independent inventors having the same idea at the same time. Although they finally settled it by cross-licensing the technology.

But there are a couple of differences here.

The first is the this was a real David v Goliath situation in which David (NTP’s late founder Tom Campana) actually did invent a product to go with his patent, and tried (but failed) to make a commercial go of it — being screwed over by AT&T in the process.  In this case it seems that RIM didn’t actually filch anything from him but, unlike Lemelson, Campana did create his version of the product and tried but failed to market it successfully. He had a real company and bad luck/business judgment kept him from being there first successfully. Only after that did he create NTP. And it was only after RIM emerged using what he thought was his technology that he tried to get some real money from his invention, as the rest of his life fell to pieces including an eventually terminal illness. RIM’s predecessor product to the Blackberry was a direct competitor to the SkyTel service that AT&T went with after junking its putative deal with Campana’s company. So even while the technology may not have been identical, the business and the solution that they were aiming at — wireless messaging over paging networks — was clearly visible.

NTP wrote to RIM which did have the opportunity to buy it off cheaply in the early days, an just blew it off. But that wasn’t the real problem with the RIM case. For a start they were happy to use a patent they’d acquired to go after a competitor and keep their monopoly status. So calling NTP a patent troll just because RIM succeeded and Campana’s business failed is a little pot and kettle. Secondly, when NTP came after them seriously, RIM dragged this out in the courts while they hoped that the patents would be disallowed (as they steadily are being, in part to their political influence in DC) again not taking the sensible business decision of settling for a smaller sum. But their real error was that they cheated in court and were busted. (The link is to a long and excellent article summarizing the whole case).

RIM’s case hinged on proving that Mr. Campana’s patents were not valid because other people had already invented wireless e-mail by the time he applied for his patents in 1991. One of RIM’s key witnesses was David Keeney, whose company TeckNow had mastered an e-mail process called System for Automated Messages, or SAM, in 1987. To prove his point, RIM’s lawyers had Mr. Keeney perform a dramatic demonstration for the jury. Using two old laptop computers and a pager, he explained how he could send a text message using SAM. Then he typed "Tommy, the deal is closed" which quickly appeared on the pager. The demonstration was crucial for RIM because it proved that Mr. Keeney’s work had predated Mr. Campana’s by at least four years and it made his 1991 patents invalid.

The only problem was that to get the demonstration to work, TeckNow and RIM had secretly swapped in newer software. NTP’s lawyer spotted the discrepancy and cornered Mr. Keeney and RIM officials during cross-examination. After a few more minutes of struggling to explain how the newer version was installed, Judge Spencer cut Mr. Keeney off and told the jury to leave the room. "I’ll count to 10. I don’t want to yell at you," the judge said, admonishing RIM’s legal team for the deception.

So after that the threats of shutdown and failed settlements got bigger and bigger and started to really threaten RIM’s business, as competitors like Microsoft and Palm jockey to get into the “wireless push email” space. Until today, when apparently the case is really over. A huge business error by RIM has cost them $612.5m plus a whole bunch more. But having said that, and even though his team was damn stupid to try to cheat in court, what RIM’s CEO Mike Lazaridis said is true.

"There’s a tremendous amount of innovation and hard work that goes into taking an idea and realizing it and then making it into a product," Mr. Lazaridis says defiantly. "There are 16 million lines of code in BlackBerry. Sixteen million. It’s hard to imagine 16 million lines of code. They all have to work in harmony and perfection to make this thing do its job. Are you trying to tell me that one little concept is more important than another little concept, and that it didn’t take man-years and man-years of effort to make all that stuff work?"

So eventually the patent system needs reform or abolition. And of course one industry that means a great deal to is biotech and pharma, where similar patent wars are waged everyday. But until then some common sense is still required.

POLICY: , Yet again caught up in the bluster of the drug war

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Last week I wrote a piece at Spot-on criticizing the Calvinists in the medicine cabinet —  the theocratic fascists social conservatives who use the DEA to dictate prohibition and are increasingly bringing this irrational posturing into mainstream Republican (and thus government) policy. One thing I touched on is the suggestion that buying up the Afghan opium crop and using it for medicinal opiates might be one way of mitigating the problems of opium being the only viable cash crop there, with the consequence that the Taliban et al benefit from controlling it. Harvey Frey, an occasional contributor to THCB, trotted out some very tired and just plain wrong comments about the drug war and prohibition:

The idea that legalizing and licensing opium in Afghanistan will decrease the illegal opium trade is fantasy. Medical morphine sulphate is cheap – far cheaper than the far less effective modern concoctions of Big Pharma. Why would any opium farmer sell his crop cheaply to legitimate buyers, when he can get orders of magnitude higher prices from the black market?

So, if we go with a social libertarian policy, and decriminalize recreational opium use, how will we deal with the medical and social problems of the vastly increased numbers of users? We seem to have trouble paying for medical care now. How will we pay for care for millions of unemployed, uninsured addicts? Will we end up like China after the Opium Wars?

I wouldn’t usually go after this type of comment here, but Harvey’s arguments are flat out wrong. And someone needs to try to convert those people who are reachable. Harvey’s a scientist, so presumably he believes in data. So here goes:

a) the concept that the farmers get more for illegal poppies than legal ones is bullshit. I have met illegal opium farmers in Laos living in huts with mud floors, and legal ones in Tasmania living in fabulous farm houses. No question who’s getting more for their crop. The difference in cost is due to the middle men’s cut which is huge, again due to the illegality of the end product…which boosts its cost to the end user. And of course that boosts the amount available for criminals (including some very nasty ones in the Middle East). This is one occasion when I’m much rather J&J and GSK had the money. If we bought out the crop then the opium farmers would have the same amount of money and the criminals/terrorists would have much less. (Hey we do it with all kinds of other agricultural crops….)

b) there is no evidence that regulating and controlling the distribution of any illegal substance increases its use compared to attempting (and failing) to maintain its prohibition. Countries that have a harm reduction policy (Switzerland, Germany) for heroin/opiate/methadone have lower addiction and use rates than those with prohibitionist policies (the US). Kids in Amsterdam use marijuana at lower levels than those in the US, while it’s freely and legally available there, and theoretically illegal here.

More importantly the costs of addiction are not predominantly those of caring for the unemployed addicts. Several programs (again see Switzerland, Germany, and even the UK in the 1990s) show that legitimized maintenance programs allow addicts to maintain a normal life, including working and holding down jobs. BTW one of the forefathers of American surgery, William Halsted,  was a morphine addict, which never prevented him from practically inventing much modern medicine. It’s driving addicts into the black market and into the hands of criminal pushers that causes them to descend into the state Harvey suggests causes so much social malaise. Furthermore, in the only ever successful case of a steep decline in the use of a highly addictive drug (tobacco in the US in the last 30 years), its use rate fell because of education about its health effects. It was and is a legal product. And should stay that way. And we should treat other drug use the same way.

Finally, the societal costs of drug addiction absolutely pale in comparison to the societal costs of prohibition. We spend some $90 bn a year trying and failing to prohibit drugs in this country. There are fewer than 3 million drug addicts. So we’re already spending around $30,000 per addict on attempting to prohibit drugs–way more than the cost of supporting addicits even if they were not contributing at all to society and the economy. And that doesn’t count the cost to society such as the crime they commit to fund their drug habits, which is eliminated in Switzerland, Holland, etc.

The whole way we approach this — justified by the type of wrong information that Harvey puts out — is completely irrational, unless of course you are one of those in the prison-industrial complex benefiting from that spending. But of course the other supporters of the drug war, the theocratic fascists, glory in being post-enlightenment and completely irrational anyway.

THCB: Health Care Reform Challenge

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death wears a smile todayHear Ye! Hear Ye! The first THCB Health Care Reform Competition is now officially (and finally) closed. 

Have THCB readers managed to come up with a creative solution to the problems facing the healthcare system that nobody else had of thought of yet?  Has a problem that has stumped the finest minds for generations been solved at last … and by a blog?

Perhaps. And perhaps not! See for yourself. Let the judging begin!

The official winners will be picked by Eric Novack and me, but you can comment/vote on entries in this thread. Nobel prizes will be awarded later if applicable.

 

POLICY: HSAs, what are they really?

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Buried in this somewhat balanced article about HSAs which postulates that the healthy & wealthy may get most out of health-savings accounts, is this gem from a leading “free-marketer” and HSA advocate:

John Goodman, the president of the National Center for Policy Analysis in Dallas and an advocate of HSAs, said that the tax incentives are appropriate because the accounts serve two purposes. “This isn’t just a savings account,” he said. “It’s self-insurance for health care.”

Meanwhile, veteran Democratic Congressman Jim McDermott tells the other side of the coin. But it’s the same coin.

A bedrock principle of this nation is to pool our resources and share the risk, because it benefits us all. That’s why we collectively support police and fire departments, national defense and a host of other essential services. The alternative would turn back the clock to the early 20th century, when people were wiped out by one moment of misfortune.

Is HSA any different? No. HSAs would accelerate a trend that has seen the percentage of employers offering health insurance drop 15 percent during the Bush Administration. A HSA would be an incentive for employers to transfer more of the burden to the individual. The outcome is inevitable, even for forward thinking, employee-focused, responsible corporate citizens. How long can they last when the competition abandons providing health insurance?

So the left and the right agree—HSAs et al move us to self-insurance or self-pay for health care and away from the idea of pooling. Of course rational people think that for health care with its uneven distribution of risk and costs, that’s nuts. The right (or at least the honest right) just thinks that it’s all OK. But at least we’re all agreed on what it is.