Above the Fold

PHARMA: Follow up to the Pipeline Post

Health care expert and all-round wonderful person Jane Sarasohn-Kahn of Think-Health has some added thoughts about what’s likely to be happening inside the pharma industry to deal with the "pipeline problem" discussed in this recent post. Jane suggests you keep your eye on three related developments:

    1.  A lot more co-marketing agreements between pharmas (a la Bayer and GSK’s venture into Levitra, Viagra’s competitor for the moment)

    2.  Pharmas are looking to biotech for new formulations, but they’re also looking to smaller pharmas too for licensing deals.  This will be important over the next few years.  Obviously, biotech will be important in the longer term, but the juries are still out on so many very expensive drugs. We will be hitting the wall on who is going to pay for those expensive bio drugs, and I anticipate that will be a big area of contention.  It’s not clear really who will be willing to pay for innovation.

    3.  We can’t switch too many more drugs to OTC as allergy and GI were the low hanging fruit here.  We’ll get a bit more savings out of switches, but then you get into another category of drugs that really does require professional input — depression/mental health, migraine, anti-infectives (gotta watch out for resistance there and over-indulging the paeds population whose mothers aren’t patient enough when it comes to ‘watchful waiting’ over ear infections), cancer, HIV/AIDS, etc.

TECHNOLOGY: Follow up to Wireless Vulnerability

I’ve been having a background email conversation with Lisa Williams who covers many medical blogs as part of her blog Learning the Lessons Of Nixon and kindly refers back to me. (Lisa does seem to think this is a blog just about scandals in health care. I keep trying to tell people that this is an objective blog about the entire health industry, but they’ll call it the way they see it, and there have been a few naughties lately!). Regarding my post on Wi-Fi security, Lisa writes:

    I was at a healthcare facility — a hospital which will remain unnamed — and found an unsecured wireless LAN by accident. It should be noted, however, that access to a LAN emphatically does not mean that you can get access to patient records.  Each system which does something for users — an email system, a database containng records, a billing system — may be connected to a network, but just because you’re on that network doesn’t mean it’s any easier for you to get into that system if you are not authorized to be there.  It’s sort of like houses on a road: Just because you can get on a street where there are houses doesn’t mean that you can automatically let yourself in to any house. It’s worse, even, because being on a computer network won’t give you the same cues that a system with data is nearby, the way your eyes will if you are walking down a street that there is a house nearby — you won’t know if there’s a door or where it is, or if you get there, how to open it. The example you gave regarding your own LAN only shows how unsecure consumer software is; most people don’t bother to have a password when they boot up their machine, and so, when connected to a network, that machine is wide open.  But almost any program in a work setting requires logon.  So, by all means, secure your network, but the best security is always provided at the "house" level rather than at the "road" level.

    It’s worth noting that workers in many healthcare settings do have Windows laptops that aren’t much (or any) different than what you or I have at home.  Would those contain personal information on a patient? What about email?  Sure.  I suspect the "big" systems that are central to containing registries of health data require *at least* password authentication, and have other forms of security.  The problem is securing PCs.  My husband works for a company that lets you configure hundreds of PCs over a network simultaneously.  Who are the biggest new customers? Hospital chains and HMOs.  Sure, they probably use it to install the latest virus patch, but I wouldn’t be surprised to have someone use it to say, Okay, everybody’s PC that we own here is going to have X security software and settings, period.   

    If the individual PCs aren’t secure, then wireless does increase the risk, because walking around with an ethernet cable looking for a jack in a hospital or doctor’s office is gonna attract some attention!  And sitting there with a wifi device isn’t.

I’d only add that the Laptop PC security management problem Lisa brings up will be expanded by the numerous PDAs and smartphones that will be making their way into clinicians’ hands in the next few years.

TECHNOLOGY: A surgeon as a futurist?

Speaking as an ex-real and current hack futurist, this title disturbs me.  However, jumbled up in this interview with ex-Yale surgeon Richard Satava are a bunch of very interesting concepts. He discusses the potential impact of smart dust, radio-tagging (RFID) and remote telemetry, xenotransplantation, nano-technology and organ regeneration on the future of human health.  If after reading it you fell like someone threw a bucket of science-fiction technology water all over you, I recommend that you hop over to Robert Mittman’s Technology Foresight columns on the iHealthbeat site, which give you more measured and controlled sips of each concept. (You need to register but it’s free and there’s a wealth of stuff there–thanks Wellpoint!)

In particular take a look at the articles on smart dust, RFID, and nanotechnology.  Robert is a professional forecaster (rather than just playing one on Yale Medicine News) and delivers a more rational explanation of the pace of change within each technology sector–not that Satava’s vision isn’t a lot of fun.

QUALITY QUICKIE: Follow up to Kentucky nurse dismissals

A cardiologist wrote to me about my post concerning the nurses fired for administering drugs without physician approval. The response suggests that there should have been standing orders, which sounds logical to me:

    In regards to intubated patients, 1) almost all ventilated patients have standing orders for either Diprivan, Versed, or Ativan; 2) these sedating medications are held prior to extubating patients; 3) in my experience, (for what it’s worth), patients who extubate themselves usually stay off the vent, either because they were ready to be extubated, or because they would rather die than be re-intubated. I don’t know why those nurses were disciplined. If they willfully ignored the MD’s order, they should be fired (unless the MD was grossly incompetent). If said MD did not given standing orders for Diprivan, etc, s/he deserves to be paged throughout the night.  . . . One other possibility:  the physicians were so incompetent, the nurses took it upon themselves to initiate sedation orders. But again, if standing orders were present, this would not be a violation..

TECHNOLOGY: Dump the stent, have a by-pass

You may recall that when I wrote about the market for drug-coated stents, I made an off-hand remark about a Canadian health services researcher who told me that stents were a waste of money because, from a health services research point of view, you get more bang for your buck by just doing angio. Well it appears that some health services researchers–who are even smarter than the Canadians, because they’re at Stanford–have gone even further and concluded that drug-coated stent or not, bypass surgery is more cost-effective than angio! (Full disclosure: I went through the Stanford HSR program & I studied under/with three of the report’s authors. I don’t know anything about this research, but I do know that they are a hell of a lot smarter than I am).

The researchers built a complex computer model based on a study done 10 years ago comparing angioplasty with cardiac bypasss surgery. They built in corrections that made the data look as though today’s rate of stent use was used at that time, and adjusted for the improved impact of today’s stents.  They then looked at the outcomes and costs of follow-up treatment over the next five years. It turns out  that the five year cost was about the same and that quality of life was actually better for those who’d had the bypass.  In fact the advantages by the ten year mark were considerable.  Here’s a detailed press release explaining the study’s methods and conclusions.

Even more direct is what the authors say in the abstract:

    "Primary stent use cost an additional $189,000 per QALY* gained compared with a strategy that reserved stent use for treatment of suboptimal balloon angioplasty results" and they conclude that "Bypass surgery results in better outcomes than angioplasty in patients with multivessel disease, and at a lower cost".

Traditionally in this country, we’ve ignored health services research as it often tells us that less care is better care, but less care means less money to those in the industry and those supplying it. Here’s a case where something that costs a little more up-front and has its own constituency (bypass surgery) saves money and improves outcomes over the long-run compared to its more recently developed rival. If this was paid for by insurance companies that expected their members to be in another plan within two years, they’d be right to go for the cheaper option.  But in this case the majority of people undergoing these procedures are in one insurance plan called Medicare, paid for by you and me. And if they’re not in Medicare when they undergo the procedure, they will be soon enough when the added costs from recurring blockages that follow angio often require another procedure. So it’s not unreasonable to expect that the folks at CMS are reading this study too and may start taking a long look the use of stents. Prepare for this study to be widely ignored by the stent industry who right now I’m sure are working on their own research to refute it. $5 billion will not go quietly into the night.

*QALY is Quality Adjusted Life Year–a measure of life expectancy that takes into account the patient’s health, so that a year lived in good health is valued more highly than one lived with serious health conditions restricting activities of daily living or requiring significant medical care.

PHARMA: The pipeline needs filling

There’s been substantial worry in the pharma business about the future of the pipeline–and rightfully so.  More than any other business, pharma companies tend to rely on one huge hit, and the spin-offs from it, rather than a steady stream of new products. The recent round of consolidation in which Glaxo and Pfizer got much, much bigger was in part an attempt to diversify their portfolios by acquiring other blockbusters, and also an attempt to make the overall corporation less vulnerable to the patent expiry of others.  As I wrote about a while back, the specter of Claritin’s disappearance removing billions in revenue off Schering Plough’s income statement haunts all pharma CEOs’ nightmares.

So how does the potential pipeline look for the latter part of this decade, when many of today’s blockbusters come off patent? Well according to a Datamonitor study quoted in this Forbes article, Pfizer has 5 potential biggies with a guestimated revenue of up to $5 billion in 2008.  GlaxoSmithKline (GSK) has only one with estimated revenues of only $700 million. Pfizer’s 2001 sales in the US were $17 billion, whereas GSK’s were $15 billion.  So it appears that GSK is more likely to be doing what it can to find more ways to fill its pipeline. Expect more activity in both big pharma M&A and looking to biotech to fill the pipelines from the big players in the next year or so.

For a good general report on the pharma industry from (believe it or not) the CMS, click here.

TECHNOLOGY: Wireless vulnerability

According to AIS’ Business News wireless networks can create major HIPAA vulnerabilities.  This seems obvious but if the network is not secure and doesn’t require authentication, anyone within range can get on the network and with a tiny amount of knowledge get into other computers on the network.  Of course that’s a huge security vulnerability. That’s well known. 

Let me give you an example not in health care but very close to a home I know well–mine.  I have wireless LAN in my office on the ground floor. To get onto my network you need to know an authentication code, so it’s very secure.  But upstairs in my house, while my LAN doesn’t go up through the floor, I can pick up no less than 4 other networks in my apartment building, for which you do not need an authentication code to get on.  Last night I was watching the baseball and (I guess illegally) using one of those networks to post on my blog.  I then shut off Explorer and email and was working on a word document (while Oakland decided that it was time for a Red Sox/Cubs world series). I then got a call from my neighbor.   My computer was still active on his wireless LAN, he had found it on his network and had found out who I was by poking around in my files, called me up and asked to get off his network!  So as an amateur "wardriver" my computer was vulnerable too.

So given the number of people who like me use other people’s LANs in an unregistered/illegal way, how many clinicians are exposing patient information without knowing it?

QUALITY QUICKIE: Kentucky hospital dismisses 14 nurses

I am deeply puzzled by this one.  Apparently patients on respirators sometimes try to pull their tubes out of their throats in a panic, and administering such patients Diprivan immediately calms them and potentially saves their lives. A hospital in Louisville, Kentucky has  fired 14 nurses for giving the sedative to patients on respirators without a doctor’s order.  Now I am not an expert on clinical procedures so take everything I say as opinions held very gently, but…..

a) Wouldn’t there or shouldn’t there typically be a standing order from the doctor as to what a nurse should do if a patient starts trying to pull their respirator out?
b) If (at least) 14 nurses were routinely doing this, it is definitely a system problem.  Should not the hospital have been educating the nurses about the rules before they fired them, as they apparently are doing now for those not fired? Has anyone in the hospital management been fired for allowing so much to go wrong on their watch?
c) Is it realistic for nurses to know these rules? On Saturday I watched a baseball play-off game where a hitter being paid over $4 million a year failed to score the winning run because he mis-interpreted a rule.  Yet he’s in the game I’m watching as I type this on Monday night!
d) A nurses’ association is trying to unionize this hospital.  Were those nurses fired purely for the sedative offence or were they involved in union activities?
e) Who creates the Kentucky Board of Nursing standards? Am I suspicious, or might a core of doctors be involved here. Don’t forget that several states restrict midwives from delivering babies, and even prosecute them, when in most other countries they are a core part of the labor and delivery system*, and there is very credible evidence that using midwives for routine births is safer than using OBGYNs.  Those rules came from the political power of organized medicine. Is something similar going on here regarding the ability of nurses to encroach on anesthetists turf?

I don’t know the answers to this issue.  But this mass firing looks like a symptom of a wider disease at this and probably other hospitals.  If you have comments, please email me and I’ll follow up later.

*For example, while the United States has 35,000 obstetricians and about 5,000 midwives, Great Britain has 32,000 midwives and fewer than 1,000 consultant obstetricians.

QUALITY QUICKIE: Managed care works in California (according to Managed Care)

While the managed care industry generally has more or less given up the concept of trying to manage the way physicians practice, it’s not quite so in California. The CCHRI, a mostly payer/provider funded group, albeit with representation from organized medicine, reported late last week that both clinical performance indicators and member satisfaction are getting better.

How come the connection between managed care and quality is still alive in California, after a combination of physician and consumer outrage beat managed care to death with a stick in the rest of the USA? Well, like everything else it’s mostly an accident of history.  California has big medical groups.  They tend to have the management structures in place that allow them (even if they haven’t always) to both measure their physicians’ clinical performance and work to actively change their behavior.  Outside the left coast physicians still tend to practice in smaller groups and the groups that do exist tend to be smaller, looser or affiliated with a clinical teaching practice (and therefore be unmanageable!).

So how did California get that way?  Well, by dint of historical accident, it had the Kaiser Permanente organization. Because of the inherent price advantage Kaiser’s pre-paid (or capitated) plan had over the traditional insurance companies, in the late 1970s and early 1980s Blue Cross went actively looking for physician organizations that looked something like the Permanente Group on which to base their incipient HMO, the forerunner of HealthNet.  They found several groups mostly in southern California.  Of course they were historical accidents too.  One, Friendly Hills, was a group of family docs who’d covered for each other on call and gradually developed closer business links.  Another, Mullikin, was (I was once told) a haven for gay doctors who couldn’t find other places to practice. By the mid-1990s these groups and their ability to deliver high quality population-based care in a heavily internally-managed environment was well known in the industry. I spent many a session frightening East Coast hospital management teams with the specter of what would happen to their  occupancy rates if those crazy Californians brought their "bed-days per thousand" rates to their town. It even got the attention of the east coast medical intelligensia. Unfortunately both the greed aggressive business tactics of the health plans and the greed incompetence of the Medpartners organization which bought the vast majority of these groups had driven them into chaos and bankruptcy by the late 1990s.

It appears that the medical groups are recovering from that era of chaos and are now getting back onto the "good" managed care track.  With employers paying more and health plans not being under the financial gun they were in the mid-1990s, the CCHRI report shows that there’s potential within California for real improvement in those population clinical improvement measures that we were all talking about 10 years ago.

POLICY: Pay or Play in California signed into law

In what may be one of his last acts in office depending on how tomorrow’s recall vote goes, yesterday Gray Davis signed SB2. I’ve written more extensively about what SB2 is and more importantly what it isn’t in this post. Essentially it’s a play or pay mandate for businesses with more than 20 workers who don’t provide health insurance.  If the business has more than 200 employees it will also have to provide insurance to the families of the workers. Most importantly it won’t take effect for more than two years or more than 3 years for smaller businesses (20-200 employees), and it doesn’t impact businesses under 20 employees at all and business between 20-50 employees will get a tax credit to cover (some of) the costs of the insurance they have to buy.

So we can expect:
a) a hell of a fight in the next two years by California’s business lobby (in particular the fast-food industry)  to overturn the law in the courts and by referendum
b) a lot of consultants emerging explaining how to restructure your business into several businesses with less than 50 or 20 employees each (depending on how that tax credit works out)
c) (when the law takes effect) some combination of job losses/higher prices for consumers as we see in Hawaii —  all dwarfed by the real driver of the employment market in California which is the national economic state of high-tech, entertainment and the defense industry.
d) gradual acceptance of that fact that that’s a cost of doing business here which the vast majority of employers were paying anyway (OK some editorial in that comment from me!)
e) more legislation to reduce medical care costs (as there is no cost control in SB2).

Of course the major issue behind all this is that 75% of the uninsured in America are full-time workers (and their families)  in low wage industries. Most of them work in businesses too small to be affected by this law, so it will only get some 1 million of California’s 7 million into insurance.


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