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TECH: Open source EMRs — how open is open? And will it matter?

cAt the most excellent HISTalk blog, there’s an interview with Scott Shreeve, Medsphere Co-Founder and Chief Medical Officer. Now MrHISTalk has once again got one up on THCB as when I was due to interview Scott (or was it his brother Steve?) at TEPR, he didn’t show up — at least not in the 5 minutes window I gave him before I wondered onto the next booth! But what’s clear is that the enthusiasm of his account of how Medspehere is creating a cheap hospital EMR based on VistA has at least somewhat won over MrHISTalk, a man known for his somewhat cynical account of the likelihood of open source actually getting anywhere in health care. You should absolutely read that interview, which incidentally as much as anything really shows that MrHISTalk knows his stuff and does his homework.

On the other hand I’ve also been corresponding with another true believer, Fred Trotter, who is responsible for the FreeB open source billing system. The Medsphere guys seem to be sidestepping the question of whether they are going to put their version of the VistA code back into the open source domain. And Fred seems suspicious that they will not. I hope to have Fred (and hopefully others involved in this discussion too) writing for THCB shortly, but in the meantime go check out Fred’s credo and think about whether the radical open source philosophy he espouses is a good fit for health care, and/or whether Medsphere’s reworking of VistA is the answer for smaller hospitals, and who gets all this stuff to the small practices who really need it.

Finally, you may have noticed that I didn’t answer the question I posed in this post’s title. But for those of you who are concerned as to why this stuff matters read Joe Kraus’ (Excite founder and former dangerous 4×4 driver at the Stanford Ski lodge) article on the relative costs of working with Linux and proprietary formats. Just think about the real impact of a ten-fold reduction in IT costs in the next ten years.

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PHARMA: Brutal news for Merck

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The jury in the first Vioxx trial has found Merck liable for the death of the patient by arrhythmia. Merck had to fight this one as it didn’t even seem to be the kind of heart disease that those people who did get heart disease in the VIGOR and other studies died from.  But they lost, and the jury awarded $253.4m.  Where they got the .4 from I’m not sure, but that’s a hell of a lot of punitive damages.  Guess that "Dodgeball" memo was pretty expensive in the end.

So if you play out the math there are an alleged 56,000 deaths from Vioxx. So if every 4 death’s costs Merck  $1 billion, then they owe some 14 trillion dollars.  That somewhat exceeds the gross national income of the country, so perhaps this amount might be reduced on appeal!

Mrk1yr But either way the recovery that Merck stock’s had since Vioxx was pulled last year is absolutely over for now. And it’ll probably be headed lower than today’s close (as usual wish that I’d bought some put options as they were expiring today!)

Here’s today’s action. Mrktoday Not exactly pretty.

POLICY/PHYSICIANS: Is the Medicare reimbursement issue more serious this time?

This week things are starting to get a little serious regarding physicians’ Medicare reimbursement. The AMA is gearing up for a fight, trying to avoid a scheduled 4.3% cut in Medicare reimbursement. Meanwhile a survey of California doctors suggested that they would stop taking new patients at the lowered rates. Much of this is just bargaining rhetoric, but CMS is determined to start Medicare down the pay-for-performance road, and has already begun to initiate this process by paying hospitals for reporting quality measures (even though it’s less than 0.5% of their Medicare revenue).

Meanwhile Republican house rep Nancy Johnson is pushing a pay-for-performance bill which would change how physicians get paid. Anytime you put doctors, money, and quality and performance requirements in a sentence together, be prepared for at the least a vigorous debate. Medicare is still the big Kahuna, and where it goes other payers will follow — if they’re not moving there already.

THCB: Podcast question

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Did anyone download the podcast into their MP3 player?  If so did it download once or twice?  (I’m trying to figure out if there’s a slight problem in the code).  Any other comments please let me know, before I launch this as a regular feature.

And I’ll be the interviewee of a podcast soon for the Journal of Medical Practice Management…(and yes Ron I’ll be talking about high-deductibles and HSAs). Details when it’s out, but here’s the RSS feed if you want to point your aggregator at it..

THCB: The First Podcast–Erick Novack

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Here is THCB’s first podcast. You can listen to it here by clicking on this link — Eric Novack interview, and telling it to "open" when it asks you.  That should make the file play in your MP3 player of choice.  But the real idea is to get your iPod aggregator (I use iPodder) to move it to your MP3 player of choice, by aiming at the RSS feed here. And then get out of the house and still listen.

All I did was record an interview over Skype using Total Recorder and then had it saved as an MP3 file.  Once I saved that up to my hosting service (easy) I figured out how to put it in my RSS feed (much harder, or at least harder finding out how to). You can either point your podcast aggregator (like iPodder) at http://matthewholt.typepad.com/the_health_care_blog/rss.xml or you can get it by looking at the "Subscribe to my podcast" line next to the site feeds in the right sidebar.

Take a listen, let me know what you think.

PHARMA/POLICY: Part D Sponsors Brace for Intense Competition for Seniors

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And you thought that Medicare Part D was a big giveaway to the drug companies and PBMs…. 

Well this article in AISHealth.com’s Managed Care Week suggests that Part D sponsors are gearing up for intense price competition to recruit seniors and that the PDPs (participating drug plans) who will do best are those health plans that understand how to take risk.

That’s a little odd as my understanding of the PDPs’ role in part D for the first couple of years was that if they lost money the government would make up the shortfall. Of course if that’s not the case and they do lose money we could see a repeat of the stampede out of Managed Medicare of the late 1990s –not something the Administration would like to see given how confusing the Part D benefit is in the first place. To be fair I can’t find any references to who’s really at risk, and whether losses by plans will be covered if participants drug costs exceed their premium income.

If anyone does understand this, please add your wisdom into the comments! Here’s the official CMS site.

POLICY: Jill Quadagno on “A critical national competitiveness issue”

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The Oxford University Press in the US has its own blog. Who knew? As a Cambridge man I shudder at promoting anything from the dark blue side of the British divide, but Jill Quadagno (who’s book on why we don’t have national health insurance was reviewed by Jonathan Cohn and mentioned in this earlier THCB post) has written a piece on why she believes healthcare is a critical national competitiveness issue". I’m not sure I really buy that argument too much — the US is too strong in some industries and too weak in others for the 15% labor cost differential that health care makes to be too big a deal overall–although obviously it makes some difference at the margin as to where GM will put its next car plant. It does seem to me that their overall problem is that they stopped making great cars in 1969.

Cam69What is more important, I believe, is that a dollar spent on health care is a dollar not spent on education, alleviating homelessness, conserving energy, etc, etc (although apparently not one also not spent on invading Iraq, running a punitive war on drug users, or building more and more prisons) — so that we should be wondering why we are spending so much on health care, and wondering what we are getting for that spending.

And as I’ve said many times in THCB, the existence of uninsurance means that there is the opportunity for the health care system to force those who can’t afford it out of the system, and therefore enables the system as a whole to increase its costs without having to be concerned about the overall impact of this price effect. If there was some mechanism by which the extra costs were capped within the system, without the safety valve of uninsurance, life would be very different. And that’s why solving the uninsurance issue is also the solution to solving the cost issue.

POLICY/HEALTH PLANS: Stronger Rules Sought on Association Health Plans – Los Angeles Times

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Following up the post about the Shadegg legislation which would allow people to buy health insurance across state lines, the other shoe dropping in the Congress is the approval of Association Health Plans — legislation passed in the House and now en route to the Senate, which basically will allow associations of varying stripes and ethical fortitude to offer health insurance across state lines also without having to adhere to state regulations. These are descendants of the Multiple Employer Welfare Trusts of the 1980s, which were essentially a license to print money for organized crime.

Consumer groups in California are prepping for these early, trying to get their retaliation in first, and are finding a willing audience in Insurance Commish John Garamendi.

HEALTH PLANS: Fuzzy math from eHealthinsurance?

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I’m having no luck getting a reply from eHealthInsurance.com (albeit I’ve approached them in a rather roundabaout route via their sponsored blogger!) about this study they put out last week. They claim that people buying high-deductible health plans from their site found that compared to last year their premiums fell an average of $29 per month. Given that those plans are pretty cheap anyway, that’s a pretty big fall. And several people have emailed me or referenced this study. (More details here and the report itself is here [PDF]). But when did you ever hear of health insurance premiums falling when health care costs continue to rise?

On further review there are more questions than answers. Who got insurance? Was this group more underwritten (i.e. healthier) than the previous year? And what benefits were they getting compared to last year?  And were there changes in deductibles, co-pays and out of pocket maximums?

Just saying that the premium went down is a bit like saying the average price of a BMW 3 series is less this year on average because more people are buying them without the fully loaded options. And if it’s really true that apples for apples the premiums went down why didn’t eHealthinsurance.com put that information in the report?

Anyone who can shed light on this, please get in touch.

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