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TECH: “Connected Healthcare ” Panel on May 4th

Those of you in or near NYC on May 4 might be interested in this panel, which Stephanie Cion, another overachieving grad student, asked me to publicize. It has the advantage of being short, having a great cast of speakers, and being cheap (or free if you gave MIT most of your parent’s disposable income during your youth). Here’s Stephanie’s promo blurb:

The MIT Enterprise Forum, a great organization known for putting to together useful events on technology and new business opportunities for investors and entrepreneurs has announced they are holding an impressive panel on Connected Healthcare next month to discuss medical technology and communications. The cost to attendees is merely $50!

Topic: The newly coined phrase “Connected Healthcare” — and the related concept “Healthcare Unbound” — refers to communication and medical technology in, on and around the body that enables healthcare professionals to monitor and care for patients outside of the clinical setting. The market for “Connected Healthcare” is estimated “to reach $34 billion by 2015.” Join our live panel of experts from various segments of healthcare and technology who will discuss the convergence of communication technology and medical devices and provide live demonstrations. The panel will focus on the following issues:

* What are the potential cost savings for expensive chronic conditions such as heart disease and diabetes?* How can businesses tap into the $1 trillion health and wellness market as baby boomers age ?* Who will pay for “Connected Healthcare”?* How are businesses positioning themselves to participate and profit in this field?* Where are the most lucrative venture and investment opportunities?

There are quite a few important speakers attending, including:

  • Elizabeth Boehm – Principal Analyst, Healthcare & Life Sciences, Forrester Research
  • George Boyajian, Ph.D – EVP, Strategy and R&D, Living Independently Group
  • William Burkoth – Senior Manager, Strategic Investments Group, Pfizer
  • Donald Jones – Vice President, Business Development, Healthcare, Qualcomm
  • Douglas McClure – Corporate Manager, Technology Services, Partners Telemedicine

  • Astro Teller

    , Ph.D – CEO, Body Media

BLOGS: Comments CAPTCHAs

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I’m afraid that a continued and increasing dribble of comment spam has forced me to put on the CAPTCHA (completely automated public Turing test to tell computers and humans apart) task so that a commenter needs to fill it in the little box when they’re done. If you have a typekey identity, you wont need to.

Sorry, but I’ve been spending way too much time cleaning out junk, and it only takes a few seconds to help us all out by filling in the box.

If you object very loudly, I’ll reconsider, but I think most people would prefer it this way. (Comments?)

 

POLICY/PHARMA: Part D–Lying with numbers

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The filthy commies at the Wall Street Journal are out doing themselves this week. Not only attacking Bill McGuire for being a(little bit too) successful capitalist, but now attacking our beloved government on the way it counts Medicare Part D enrollment. And boy is that 30 million number convoluted. Here’s the WSJ article basically in full liberated from behind their firewall. You may note that it’s basically what I, Kate and the rest of the gang over at TPMCafe’s Drug Bill Debacle blog, Joe Paduda and others have been saying for months—voluntary enrollment in this plan is low, and may be too low for it to avoid adverse selection. Read on to figure out how and why

Are Medicare Estimates Too High?Government Says 30 MillionAre Enrolled in the ProgramBy SARAH LUECKApril 21, 2006

At first glance, information released Thursday by Medicare seems to indicate that 30 million people are getting prescription-drug insurance from the federal health program for the elderly and disabled.

Not exactly.

Despite the headline on a government press release — “30 million Medicare beneficiaries now receiving prescription drug coverage” — a smaller number is actually enrolled in the new program, and some of that group had coverage before. As of April 18, 19.7 million beneficiaries are getting drug insurance from Medicare. Of that group, 5.8 million already had coverage from Medicaid, the state-federal program for the poor. An additional 6.8 million people are getting drug coverage from former employers; the coverage is partially subsidized by Medicare. That means a total of 26.5 million people now are benefiting from the Medicare drug program.

To get to 30 million, government officials also counted 3.5 million people who have drug coverage from the military’s TRICARE program or federal-employee benefits, but aren’t signed up for the Medicare benefit. Christina Pearson, a spokeswoman for the Department of Health and Human Services, says the Medicare beneficiaries, regardless of source of coverage, “were able to make the choice that works best for them” because of the new drug-benefit program.

To judge the progress of the enrollment effort, it’s important to account for Medicare beneficiaries who have drug coverage from other sources because they aren’t likely to sign up for the new program. In addition to the 3.5 million Tricare and federal government retirees, an estimated 5.8 million Medicare-eligible people get drug access through the Veterans Administration, their current employers or companies not taking a Medicare subsidy.

When people with other sources of coverage are added to people signed up for Medicare drug plans, about six million people remain, and presumably don’t have drug coverage. This group is the target of the massive campaign by the government, insurance companies and consumer groups to maximize enrollment by May 15.

The Medicare drug benefit has become a political issue, with Democrats criticizing it as too confusing for many seniors. Enrollment numbers, too, have become a flashpoint, with Bush administration officials saying they have “passed their projections,” as Health and Human Services Secretary Michael Leavitt said Thursday. A critic of the drug benefit, Medicare Rights Center President Robert M. Hayes countered, “Every few weeks the administration lowers its standard for success.”

Ms. Pearson, the HHS spokeswoman, said that’s not true. “We’ve consistently said our goal was 28 to 30 million,” she said. “And by any measure we’ve surpassed that goal.”

In fact, Mr. Leavitt and Medicare chief Mark McClellan, have used that estimate since last year, citing Wall Street analysts. A higher projection by Medicare actuaries, of 39 million, was published in the Federal Register in Jan. 2005. That, too, included retiree plans. Now, the actuaries’ projection is lower, at 37 million as of February. Medicare has not yet said why.

Dan Mendelson, president of Avalere Health LLC, a Washington-based consulting firm, and a former Clinton administration official, said the numbers are consistent with what he had expected. “I think they’ll pick up another group of enrollees before the deadline, maybe a million. Then everyone will squabble over whether it’s a big number of a small number.”

At the recent WHCC congress an audience member (well, as I had control of the question device I’d better admit that it was me) asked this question of Abby Block, the person at CMS who runs the program. Here’s the take from my post earlier this week.

There’s more than a little obfuscation about these numbers, especially the 29 million number. How many people over 65 now have drug coverage who did NOT have it before? Abby: that number cannot be determined! We know how many have enrolled but we don’t know what they had before

So rationally we know that only a maximum of 7 million people could have new coverage, and of course some of those had coverage anyway before even if it wasn’t as good. So as the bill is supposed to cost $900 billion over 9 years or whatever tehe final estimate was, we’re spending some undisclosed number north of $100 billion a year, to get drug coverage to less than 7m million people! This to me sounds damn expensive. Then of course cynics can note that not all that money is going to the patients. A few other people are getting their palms greased in the process. Another article in the WSJ today (this one’s free) points that out pretty clearly….and you know who they are!

POLICY: Durenberger/Stark

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Two veteran healthcare experts….

Stark and Durenberger agree that bipartisanship has gone, because there is an effort to dismantle Medicare. “If god had to make Republicans, he should make them all like Dave Durenberger”.

Stark: Hubbard says that well informed consumers will be shopping for the best deal. But in California was it cheaper in Tenet’s Redding hospital? But it killed alot of people. We spend the least on IT usage and the least information. Doctors cant be ranked and rated, and wont do it amongst themselves. Thinks that HSA’s will just shift the cost to poor and an sicker.

What’s the democratic position. Jesse Jackson and Pete have a constitutional mandate to give a right to health care. Only Americans who have that right are prisoners. Stark-“If it’s good enough for Rostenkowski and Martha Stewart, it’s good enough for me!”

Durenberger: the challenge with Hubbard’s position is that the difference between what we need and what we want. May be able to effect the price of what you want. But his secretary had a heart attack, got a bill for $4,500 from her CDHP because her anesthesiologist was out of network. She never knew who the anesthesiologist was , of course!

Stark: If you allowing people to get in the game late because you don’t insist on universal coverage, then we all pay the cost.

Durenberger—the challenge of the HSA/HDHP is that we are disintegrating the coordinated care of Kaiser, Group Health, etc.

Stark—in my county 600K are members of Kaiser Permanente. It’s attracting docs, and that’s the way more are choosing,

Why would it be such a bad idea to move coverage to CMS, where cost to deliver service is 6% over actual costs, rather than 3rd party providers that need to make at least 15-30% margin. if we can control the marginal cost to deliver reimbursement, why would we not want to take these quick dollars out of the system?

That’s not the real problem. the problem is the Berwick/Wennberg data showing that low cost high quality care is in some places, and that sends money to other places with worse value.

Are there any portions of the Bush health agenda that are unlikely to pass this year?

Stark-No substantive parts will pass this year. But we (the Dems) dont even know where the committees meet anymore. The divisions within the Repubs in the house will prevent anything.

Will this be a big issue in the next presidential election?

Durenberger—we have a governor who wants to make this an issue and both Romney and Huckabee (Arkansas) will make that an issue.Stark—but it’s a major issue for Dems too, as people are losing their insurance via their employers. people are scared…

What about  outcomes/quality research?

We do have some research but not definition of what is quality for doctors and consumers.

Not just the price but what you’re getting for it.

How do we really determine the price? 

Durenberger—No one can give accurate pricing as someone is subsidizing something else. Unless we deal with that, which gets us to the point of universal coverage. We’re all Americans, and if we get to universal coverage, then there’ll be lots of incentives to drive efficiencies.

Stark—Cross subsidization goes on all the time in hospitals and probably cant identify it

If we have price transparency without solving the uninsured problem, wont this make that worse

Stark — Yes and transparency it a myth. He’s trying to get a price for a colonoscopy in DC hospitals. He cant even get a price per procedure let alone a cost accounting breakdown as to why this is cheaper in Rochester MN.

POLICY: Hubbard, Bush’s guy on health care

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(Note-I moved this to the correct sequence in the WHCC Conference)

Allan Hubbard is Bush’s health care guy. Here’s what he had to say (my comments are in parens)

Primary reason for health care costs being so high is third party pay. When we consume healthcare we don’t ask the price, so we treat it if it’s free. And out of pocket costs have been declining over the last twenty years (Ed notes—although not the last five). And therefore price pressure being absent prices go up, and efficiency goes down.

There are three visions—status quo but that’s not sustainable

Single payer, expand Medicare a la Ted Kennedy, which will lead to rationing.

Or we can go to consumer directed health care where consumer picks amongst transparent options.

(He seems to have missed all the other universal coverage options—never heard of Enthoven, Fuchs, et al?)

The HSA is the solution, and a portable HDHP will not be underwritten for health reasons, so that’ll reduce job lock. But there;s still one problem that exists, and there’s not good information about pricing. Right now providers do to make that information available. He asked for people who disagreed, and then picked on a doctor who said no.  The physician said that he doesn’t know what the “best heart surgery” meant, so how could a consumer? (And Hubbard will probably join Beth McGynn on the AMA’s contract hit list should the news about his plans get out).

You talked about consumerism as a way to reduce prices and increase efficiency. What about the medical/emergency situations when the patient doesn’t have a choice about when, where and what type of care takes place?

Doesn’t work in emergencies…but that’s rare

Do you think HSAs could make the problem worse by driving the young, healthy or wealthy into these plans leaving the sicker in traditional plans which will drive up the cost of health care for the most vulnerable part of society?

Hubbard says that its not for the wealthy, as 40% of people getting them earn less than $50,000 (of course that means that 60% earn well more than the average, but lets leave that aside!)  For the chronically ill—he says 2–5% of population—this doesn’t work so well. so Administration wants to allow employers to put a bigger amount in the HSA for the chronically ill. But thats the problematic part. (Yup he admits it!)

(THCB readers know what I think about this, but after all you’ll comment here. )

POLICY–Treasury Sec Snow

John Snow, Treasury Secretary, never realized that he’d be spending so much time on health care, but it’s the elephant in the room of the fiscal future of the United States. Medicare could end up at 20% of GDP of health spending, and that will take all of the US budget if not stopped. Secondly, this hits at competitiveness for US business. And of course wages becoming a smaller part of total compensation.

Health care produces the most new products and probably best doctors in the world. But there;s a breakdown between all of that excellence and all that money and its outcomes. HC is way behind the times, especially in use of IT.

Too many people uncovered, too many small businesses uncovered. Too expensive and rising at too fast a rate.

So the Administration has an agenda, etc, etc. Of course he starts on the junk lawsuits issue, and gets a smattering of applause. He says HSAs are a promise, not a panacea. But he says (after a lot of well known rhetoric about HSAs) that there’ll be 20m Americans in HSAs, and many of those will be previously uninsured.

Most of health $ spent in last months of life and 5 percent of population drive over 50 percent of cost. When will we begin discussing end of life policy?

The idea is to have a refundable $3,000 HSA for that part of the population.

Should employers be in the business of providing health coverage?

It’s an accident that we’re there in the first place (price controls in the war). Best way to organize health care? No, but it’s what we’ve got. We wont get rid of it but the market is leading to major changes.

79% of the audience says that the percentage of health insurance coming from employers will be lower than it is today. And Snow agrees.

 

POLICY/PHARMA: WHCC-Medicare Part D with AARP and CMS

Abby Block from CMS and John Rother from AARP

Abby says 6.4 million in PDPs…29 million have drug coverage overall (although that counts everyone).

What have they learned from Part D? A bunch of stuff about monitoring plans and their operations, appeal management, pharmacy relationships are on their mind (Surprise, surprise). Based on the applications for 2007 the program seems to be healthy. “Going to be sure that they have adequate coverage for 1–800 Medicare and going to be sure that the plans will have adequate coverage too”.

Many things that we’re still working on but the glass is more than half full.

John Rother— it’s a terrific benefit for those who are using large number of drugs/high cost, and for those who are in lower income, But it’s not meeting expectations in the enrollment of low income seniors.  That’s the group for whom  it offers the most value but we’ve only enrolled 20% of them! That’s a tragedy. the program is stable.

To make it better need to something about price/cost control, and also to remove the asset/income means testing in the premiums, as this punishes those who’ve done the right thing.

Medicare is finally taking the leadership of becoming a health care program not just a payment program, so Medicare must keep pushing. The costs that Medicare encurrs are part of the whole system, and we must address the whole system.

How well are the private companies doing in negotiating prices?

Rother—better than CBO projected, but terrible compared to any other country in the world.Block—it’s been very encouraging and the plans have had significant impact

There’s more than a little obfuscation about these numbers, especially the 29 million number. How many people over 65 now have drug coverage who did NOT have it before? Abby: that number cannot be determined! We know how many have enrolled but we don’t know what they had beforeRother: said that 1/3 last year had no benefit and 1/3 had inadequate benefit….the test of the program will be seeing that difference when the data is in. Abby: Have a huge outreach effort trying to get low income people to enroll. But that has been a huge concern.

What about delaying the penalty date?

Abby: A firm deadline makes sense., If you delay it. people will delay. This month we’re seeing a big increase, because of the deadline.John: The deadline is to encourage healthy people to enroll. Not appropriate for the low income population and that will be extended. But this may be revisited as a 7% increase on premiums may cause a political problem!

Do you feel the AARP run Part D product places the organization in a conflict of interest trough being a third party senior advocate as well a provider of the good?

John: No! We think that’s a good value plan for our members and its an arms length relationship internally.

Will there be more legislative fine-tuning?

Abby: we hope not!John: we hope so, on delaying enrollment, on formulary lock-in and demanding secretarial authority on, and perhaps requiring plan sponsors to only offer two plans.  We want fewer better choices than the mass confusion we saw earlier this year.Abby: We want stable formularies, but there is good reason to allow change when new generics come in, and some other reasons (such as drug price changes)

Will CMS provide aggregate data on what percent of mfr rebates were passed on to patients in the coverage gap?

Abby: 100% of rebates are passed on in the coverage gap (of course she doesn’t mention that rebates are just one way of hiding the money between pharma and PBM without passing it on to end customers…)

What tradeoffs do you see (and would you accept) between limiting innovation in pharmaceuticals and lowering unit costs for today? Does it make better sense to try to measure total value from enhanced Rx payments versus improvements in beneficiaries’ health status/reductions in Part A & B spending?

John: Price and innovation aren’t connected, especially with twice as much being spent on pharmaceutical  marketing as on R&D

Given the number of plans and continued questions from seniors, do you anticipate longer open enrollment periods in the coming years?

Abby: Need a longer open enrollment period and launch a campaign to get people to enroll earlier. Number of choices will be reduced as the consumer shows what they’re interested in buying. We want clearly differentiated products that beneficiaries understand.

Why has the enrollment for low income seniors been so low, as the bill was basically set up for them and benefits them the most?

Abby: Well there’s an application form, and its complicated for them. But here is a point of sale application form and people who weren’t enrolled thought they were and got it at the pharmacy

John: Only face to face enrollment works. Language and health literacy issues, and many people don’t want to fill out their information, especially about the asset test. AARP is funding a campaign through churches, and there are lots of meetings set up. But it’s slow going.

How will this be different in 5 years?

Abby: It’ll be taken for granted….John: Depends on who’s running the government; Democrats would probably get rid of asset test, have a separate benefit. The other issue is the price behavior of Rx. If they head up fast, there’ll be congressional intervention.

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