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POLICY: Medicaid muddles on

Today’s story about California hospitals suing Medi-cal comes on the heels of a
week of meetings between state governors and the Bush administration about
Medicaid. Medicaid has long been a dog’s breakfast of American health policy
with all types of programs thrown together. It’s a health insurer for the very
poor, it’s a long-term care plan for some of the elderly, it’s a subsidy program
for large inner city hospitals (the DiSH program), and it even pays Medicare
Part B premiums for those "dual eligibles" too poor to afford them. In addition,
in many states the CHIP program for near-poor children is rolled into Medicaid
too. Furthermore, many states use what are now called by HHS secretary Leavitt
"accounting gimmicks" to get more of their program on the Feds’ tab.

The problem is that all these programs tend to be underfunded anyway, and in
a time of state and federal budget squeezes, they come severely under fire.
Taking even another $6 billion per year out of the program, as the
Administration proposes, feels to the states like getting blood out of an
already over-squeezed stone–even if the GAO says its only $5bn a year. A rational system would somehow fold Medicaid into
some type of universal insurance system. But we are not getting that any time
soon, and right now many poor Americans and their safety net providers rely on
Medicaid to keep them from toppling into the abyss. So expect the politics of
desperation to play out in that sector over the next few months.

This is not going to be a fun time to be either a Medicaid recipient, or worse someone who would like to be.  And that includes a lot of young and poor children.  It’s also not going to be fun to be a safety-net provider who relies on Medicaid as one of their better payers.

PBMs: Express Scripts net surges

From the "why does this keep happening?" file, it looks like the PBM sector is continuing to remain very profitable. Today it’s the turn of Express Scripts to announce that  its earnings were up 13 percent. It also revised up expectations for next year.  The stock rallied about 7%.

THCB continues to be baffled at how the PBMs and other health plans are getting away with this.  After all this is a group that has had no success in saving its clients’ money on drugs in the last 10 years, and a recent survey showed that fully one-quarter of employers believe that PBMs are responsible for increasing their drug costs.  But with the Medicare drug benefit giving the PBMs increased visibility and access to a whole new market of customers, it would be a brave short seller to look for the top to the stock here.

TECHNOLOGY: Nine Tech Trends and one big barrier

I am wrestling with a much longer piece on the EMR than I was hoping it would be, but silly me I’ve got myself mired in CHINs, ePrescribing and RHIO.  And given that I’m going to see Duran Duran tonight I will doubtless be further into "Rio" before I’m done, and hopefully she’ll still be dancing in the sand…

So meanwhile go look at these pieces.  In the first Healthcare Informatics features Nine Tech Trends that it thinks are hot in health care. I’m not certain that the list is quite correct, but it’s well worth a scan and I do like this one quote from a hospital CIO in New Jersey:

"I really think we’re just beginning to see digitization," Sharrott
says. "I think if we’re talking 10 or 20 years out, the amount of
integrated digitization is going to be amazing."

Meanwhile the ever wonderful Jane Sarasohn Kahn has her wrap up from HIMSS over at iHealthbeat. She pretty much confronts the inter-operability issue head on. 

Finally, Brailer is very concerned that adoption will be done in silos,
creating more IT fragmentation and an even greater barrier to
interoperability. This is a very real possibility because in the United
States we’ve made an art out of building a fragmented health system
based on outmoded regulations, unchecked competition and other
externalities. The great value for Americans and the national economy
in achieving interoperable health information networks will be what
Brailer calls "the ubiquitous sharing of patient information."

The
leap of faith here is that nationally interoperable health information
networks will be developed as regional programs adopt sharing through
open standards and convergent business practices and policies. As
Brailer characterized, interoperability will occur "not from the top
down, but inside-out."

Developing interoperable health
information systems will require the collaboration of the broad range
of stakeholders in communities to give up their proprietary data
concerns and ante up cash and a collective spirit.

PHARMA: DTC WARS, Epsiode IV (with more apologies to George Lucas)

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Apologies in advance, THCB goes back into movie mode once again to discuss the somewhat arcane subject of DTC Rx marketing…..

YoderA long time ago in a universe far, far away a bright young survey researcher enrolled with some fellow Jedi warriors to make the universe safe and easier for the pharmaco guild to better target the right citizens of the galaxy with the right message about their wondrous potions. The Jedi warriors wanted to build a great database that would create a Beacon to tell the noble pharmaco guildsmen which of the citizens of the galaxy were responding to their clarion calls, and how they ought to change the sound and direction of those calls.  Their goal was for the the noble pharmaco guild to spread health and prosperity while increasing the general well-being and respecting the sanctity of the galaxians’ information as mandated by the Emperor’s HIPAA army — while cutting down on the spending on those pesky airwave borne messages that ineffectively carried the narrow message far wider than it needed to go and surrounded every spare moment of the great Seers’ nightly network prophecy.

Well, as is common in these stories, this episode opens with our band of Jedi heroes distributed to the four corners of the galaxy. Their mighty Death StarData Base was never properly completed before a cold wind crashing down from the NASDAQ quadrant blew fear and loathing into the heart of the great vulture capital birds, and they ceased flying around the universe distributing their nourishing droppings which had kept the Jedis warm and safe while they built their great i-Beacon. Oh, how the poor Jedis suffered, as did many of their fellow warriors in the freedom loving Dotcomposition and many were forced into exile for lengthy periods, marooned on the tropical beaches of the land with the Faraway Thais.

Indeed while the Jedis endured their exile, the pharmaco guild kept sending out its messages, a little less in some years but again with greater volume in 2003 and 2004, mostly because of the need to let the galaxy celebrex the nexium generation of wonderous potions. But the pharma guild still had to rely on the whispers of Oracles and Monitors to figure out if their message was getting across.

Indeed the Monitor which drew its wisdom from a mere 6,000 voices empaneled across the known galaxy continued to tell the noble pharmaco guild that indeed their clarion calls to the undifferentiated hordes known as the health care consumer were "increasingly believable and likeable". Now the brave pharmaco guild members really believed that sending their messages of health and happiness helped their mission.  And there was some reason to believe that it was true. Indeed the green eyeshaders at the Imperial Senate reported that:

DTC advertising appears to increase prescription drug spending and utilization. Drugs that are promoted directly to consumers often are among the best-selling drugs, and sales for DTC-advertised drugs have increased faster than sales for drugs that are not heavily advertised to consumers. Most of the spending increase for heavily advertised drugs is the result of increased utilization, not price increases. For example, between 1999 and 2000, the number of prescriptions dispensed for the most heavily advertised drugs rose 25 percent, but increased only 4 percent for drugs that were not heavily advertised. Over the same period,prices rose 6 percent for the most heavily advertised drugs and 9 percent for the others. The concentration of DTC spending on a small number of drugs for chronic diseases that are likely to have high sales anyway and the simultaneous promotion of these drugs to physicians may contribute to increased utilization and thereby increase sales of DTC-advertised drugs.

But the pharmaco guildsmen still didn’t know nearly as much about their messages as their friends in the consumer packaged goods guild. Where were their ACNeilsen data on the citizens of the galaxy’s consumption habits? They couldn’t track whether their citizens saw their messages and bought their drugs because they couldn’t link their viewing, activity and usage data together safely?  And where was the data broken down by planet and type of citizen? In marked contrast, they did know much about the potion-prescribing habits of the Shamans who were overwhelmed by visits from their drone detail armies because they were told the answers by the all-knowing Xponents of the IMS.

In the good times perhaps these details didn’t matter very much. For example a group of wise men in an ivory tower quoted by the Oracles at Brandweek (Ed: don’t be fooled by the anti-pharma group hosting it, this is a balanced article) found out this :

A study by Harvard University’s schools of medicine and public health, published in 2003, found that for every 10% increase in DTC
advertising, drug sales rose 1%. That does not sound too impressive until it is translated into hard
cash: Every additional dollar spent on DTC yielded an average of $4.20 in sales.

So perhaps there was no need for the pharmaco guildsmen to be able to link the real uses of their potions in real people to the messages they were sending out; for a wise man once said "if you cast enough mud against a wall some will stick up there".

But then came a pestilence upon the pharmaco guilds. All at once the flood of wondrous potions coming down their great pipeline from the wells on the planet Arandee began to slow. In woe the guildsmen looked at each other and searched hard in the neighboring planets of Bio and Tek. But to no avail, and their creditors and bankers from the iBanker guild over on the Street of The Impassable Barrier, took askance at their new found woes. Many pharmaco guildsmen who’s life had seemed as happy as walk through a field full of daisies in one of the allergy messages found that their bankers, schering a fall in their profits, had mercked down their stock price.
And worse was to come.

Some of the wondrous potions were perhaps not quite as wondrous as the pharmaco guildsmen had first said, and and some heretics declared that the messages of the guild were not to be trusted, and even had hidden the truth from the good citizens of the galaxy in their messages. Still other heretics released satirical songs suggesting that anyone believing the messages was a dumb as a mark at a carnival, and some of the guilds members took fright and began to dismantle some of their detail drones that visited and policed the shamans in every nook of every planet.

Then even the guildsmen’s friends who lived in the Imperial Bureaucracy in the friendly city of Effdeeay suggested that the guildsmen might need to quieten their messages and even told the guildsmen to stop them all together for the mysteriously troubling potions known as Cokstoos. And the great bastions of information across the galaxy began to suggest that the overbearing amount of the messages was counterproductive and might even be beginning to have a wearying effect on the citizens of the galaxy. There were even calls for the messages that surrounded the all knowing Seers delivering their nightly prophecies to be banned altogether, and for the power of persuasion to be used only on the shamans and not to be taken direct to their supplicants. Even the noted wise MackMan who was a good friend of the pharmaco guildsmen suggested that the time had come to change their tune and to understand that they couldn’t escape all culpability with a quickly read disclaimer.

But the lone Jedi survey researcher looked on from his lonely exile in a planet on the far left coast of the galaxy, and his mind wandered.  He wondered if the pharmaco guild, too, might not have been happier if they had been able to better target their messaging. Perhaps they didn’t need to surround the seers with messages about their potions as they prophesied, and perhaps if they hadn’t the prophecies would have not been so nasty about the pharmaco guildsmen quite as often. Perhaps they didn’t need to persuade the not-really sick that they had another dread aliment.  Perhaps instead they needed a way to connect just with the citizens of the galaxy who could truly use their help. Perhaps they could benefit from knowing what those citizens who had problems that they could help were doing in their everyday lives, and how they could target them more effectively, and hand over less money to the Seers’ employers in the process.  The lone Jedi wondered wistfully if the Force might ever return to the DeathStar Data Base, and if it would one day be able to help the right citizens hear the right message from the guildsmen, without pissing off the rest of the universe.  Would the pharmaco guildsmen change their tune, or would they
stubbornly continue on to ultimate humiliation in the next great battle
to come?

The lone Jedi sighed. The Force was weak. He saw no way to recreate the DeathStar Data Base by himself.  But he began to realize that his fellow warriors had been on the cusp of a great thing before they were scattered to the four corners of the galaxy. And he wondered if an alternative universe of anonymity protected one-to-one marketing wouldn’t just have been better for the pharmaco guild, the citizens and the galaxy. Perhaps the prophecy of old would come true and a new Jedi would be found to lead the warriors, but the lone Jedi didn’t see much hope.

PHARMA: John Mack on the Pharma Elephant in the FDA’s front room

John Mack has an excellent article in his Pharma Marketing Blog called FDA Advisory Panels: Elephants in the Room. I’m glad he wrote this so I don’t have to.  The news is that 10 of the 29 panelists had active ties (i.e. money) to Pfizer and Merck, and that those 10 voted in favor of keeping Vioxx and Bextra on the market.  As both those votes were pretty close, the quote unquote unbiased panel members voted to remove them from the market, and the quote unquote biased panel members were responsible for the swing vote, which by the way resulted in bumping up Merck’s stock some 15%.

But  as Mack points out, there’s really no one who works closely with pharmaceutical development who can possibly avoid taking money from pharma in one way or another. Either they are advocates who are paid to promote the drug (key opinion leaders) or they are having their research supported by one pharma or another.  Or they are developing their own products and are hopeful of pharma support in the future. And of course these are open government panels so every pharma knows who’s for you or against you! 

This deal was made back in the early 1980s when the biotech industry emerged and scientists were allowed to take their government-supported research into the private sector. Since then the dividing line between government-supported and conducted research and the private sector has more or less disappeared. To put it back firmly into place so that there are "unbiased government experts" available with no ties to the industry they are making decisions about would be a huge reform. Not one that, even post-Vioxx, there seems to be much appetite for. So realistically these conflicts of interest will continue by necessity and we’ll just have to rely on the personal integrity of those involved and look hawkishly for pharma’s reaction to individual votes.

POLICY: Disappointing Presidential silence about illicit drugs reveals bankrupt policy ideas

Not that anyone can be in the least surprised, but it’s clear from the tapes secretly recorded by one of his henchmen that in 1999 Bush privately admitted to both taking marijuana and cocaine in his period of "youthful indiscretion". There’s been a surprising lack of comment about this other than this one article in the Chicago Tribune called the Disappointing presidential silence about illicit drugs. The incredible hypocrisy in which Bush feels that his drug use was a "wild, youthful indiscretion" but that any current drug use by a young person is a seriously punishable offense leads to two terrible consequences for society.

First, Bush has presided over an Administration which has dramatically gone after anyone who remotely disagrees with it on the drug issue, including medical marijuana advocates and pain doctors, with the full force of draconian drug laws. It has also left more than 33,000 young people unable to attend college because of the heinous HEA amendment than bans anyone with a drug offense of any kind getting a Federal loan.  Let’s not forget that has this law been in place in the 1970s that number ought to have included Bush and former Eli Lilly exec, and current Indiana governor Mitch Daniels who was convicted of low level drug dealing at Princeton. The hypocrisy and lack of contrition from those holding this position is unspeakable.

Second and much more seriously, the ridiculous head-in-the-sand antics of the government (and this includes both Republican and Democratic Administrations and Congresses over the last 30 years — although the Republicans are clearly worse) on drugs means that the appalling social and health impacts of drug abuse are essentially allowed to go unchecked, leaving the taxpayer and the health system to deal with them. There are some very interesting models in harm reduction, and drug maintenance programs that have enabled addicts in Switzerland, the UK, Germany and now Canada to live relatively normal lives at little cost to the taxpayer and with minimal impact on society — as opposed to the huge amount of crime and personal cost seen in the unregulated activities of addicts here. But no one in the US will even discuss these models.  Instead
we allow the war on drugs to continue to fill the coffers of law enforcement departments and criminals and dictators across the world, and force taxpayers and health care workers to keep paying for it.  That no fuss is made about the fact that the current President essentially admitted to drug use in his twenties, shows how we’ve accepted this appalling situation as being only too normal.

BLOGS AND BLOGGING: Teething troubles

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There’s been a little bit of teething problems this week, and that with a bunch of other stuff going on with me means that not much happened here today.  Two quick notes.  1) If you have any suggestions about font type, color for reading, printing, etc, or indeed anything else about the look and feel, please let me know by email to matthewATmatthewholtDOTnet  I really appreciate the comments I’ve had during this transition period.

Monday will be  a bigger better day with articles about DTC and EMRs. I will be returning to the late and not too lamented Star Wars motif, so I encourage you to go read the one I wrote in that style a while back.

POLICY: Firing smokers? Who’s next?

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One of my favorite non-health care policy organizations, the Drug Policy Alliance, has a flash animation out about an insurance company that fired four smokers for possibly smoking in their free time. The company allegedly believes that it’s OK to fire smokers because their health care costs are likely to be higher than other peoples.  The Drug Policy Alliance folks’ sub-text is of course that what you do in the privacy of your own home away from the workplace is your business and not anyone else’s including your employer, so long as you do a good job in your workplace, and by that they mainly mean pot-smoking.  There was also a great study a while back that showed historically that companies that drug-test their employees do worse in terms of standard business measures like productivity and stock performance than those which don’t.  And of course no one is yet alcohol-testing employees, unless it concerns taking alcohol immediately before flying a plane or something similar which impairs the ability to do a good job.

But the key points in this "firing smokers" issue were drawn home to me while watching a Harris Interactive webinar yesterday. (The webinar will likely be up here sometime soon but doesn’t seem to be up yet.) They’ve done a lot of work about the obesity problem, and as their colleague Bill Rosenberg said it’s getting clearer that there’s little point in a company trying to do anything to reduce the obesity in its workforce  — there’s no ROI there.  So the next best option to reduce health care costs is of course to get rid of those who cost the most.  Once we’ve got rid of the smokers, drinkers, druggies and perverts, then who’s next?  The obvious answer is that it’s the fat and the sick, who of course tend to be lower paid than average, which in turn means that their health care costs are a higher proportion of their overall compensation.

I also had a recent meeting with Brian Klepper and Patricia Salber of the Center for Practical Health Reform.  They believe that employers are dropping out of offering benefits rather more rapidly than the overall figures suggest, and Brian points to a study showing that only 45% of jobs come with health insurance (as opposed to 62% of people getting their health insurance via someone’s insurance), and that the percentage of jobs offering insurance is going down by up to 5% a year. And of course the amount of coverage being offered in the brave new high-deductible world is at least somewhat (and maybe greatly) less than people were used to a few years ago. They believe that this is leading to a crisis of funding for the whole system, and have some interesting ideas about what to do.

But in the absence of reform (which will last at least another 4 years) there’s a very nasty scenario in all of this.  Employers may actively start looking at their workforce with an idea of who to keep in and who to kick out, based purely on their health status.  After all insurers have done this for years, to great effect on their bottom lines.  Now that many big employers really see health care as their biggest challenge, and small employers get the picture too, what’s to stop them really looking at the pre-cursors for health care costs and getting rid of people who smoke, look fat, or like a drink, or are getting old?  Nothing really, especially as a class-action lawyer won’t take on a small company because they haven’t enough money to be worth taking down. Particularly for a small employer, they don’t have to state anything in their policies about it, or even look into medical records, as those things are pretty self-evident.

And of course the costs of this end up on the individual and the taxpayer.

POLICY/POLITICS: Fast Times at NIH by John Pluenneke

An internal review at the National Institutes of Health has
cleared many of the NIH researchers the agency had earlier accused of violating
conflict of interest rules, the Washington Post reports.
NIH director Elias Zerhouni asked for sweeping restrictions on outside
consulting after reports of widespread rule breaking. The Post notes:

"The finding that most of the allegations are false has
many scientists complaining that Zerhouri did not get a better measure of the
the problem before succumbing to pressure from congress and the government
ethics office to prohibit virtually every kind of outside collaboration and to
demand across the board divestitures."

The Los Angeles Times played a major role in bringing the consulting crisis to
a head with a series of front page stories
in December focused on prominent scientists at the NIH including cholesterol
researcher Dr. Bryan Brewer, a member of the team which developed the nation’s
new cholesterol guidelines two years ago and Dr. Harvey Klein, a leading expert
on blood transfusions.

Interestingly, the adversarial relationship between the paper and the NIH dates
back to at least to the late nineties, as this 2003 piece by Slate’s Jack Schafer
documents.

The Post has an editorial
today which agrees that changes were necessary  but argues the
proposed restrictions on consulting and stock ownership are far too
harsh.  As the paper notes, the findings of the internal review appear to
support the position that Zerhouni may
have seriously over reacted.  Of course, it remains to be seen if anybody
will be convinced by  an internal review.

POLICY: More on the realities of the crisis of uninsurance, by Anonymous

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There’s been quite a fuss about the recent study showing that bankruptcy is frequently caused by high health care bills, or at least by the inability of those who are sick to return to work and pay off those bills. THCB contributor Anonymous wrote about her tough experience accessing care last November.  Now the bills are due and she finds herself on just that slippery slope. Here’s Anonymous story:

I was seen at the Alta Bates ER twice within a week for the same problem. Both times I received a form for the charity program. No one explained anything to me about two separate billing systems or that the charity program wouldn’t apply to the physician part of the bill. I initially needed help providing the proof required by the charity program. Alta Bates ignored my first letter in this regard, and I went through phone tree, transfer, and wait time hell to get to the right department to help me with the problem. When I eventually ended up with a financial counsellor, who was very helpful. She told me she could use  my prior year bank statements, and the charity care program then covered me 100%. I thought everything was wrapped up at that point.
A couple months later, I started receiving threat letters and calls from a collections agency. I called the financial counsellor and asked why I was being billed after I had been covered by the charity care program. She told me that there was a separate physician’s bill not covered by the charity care program. She also told me I had another outstanding bill from 2001(!) The 2001 bill is from a time when I was covered by insurance: I didn’t find out about that until it went into collections, either. But at that point I called my insurer, Blue Cross, and they took care of it. I haven’t heard about it since. Now Alta Bates expects me to remember my insurance information from 2001 to fix it when they were the ones who made the mistake of only applying my insurance information to one of my bills. I’m just boggled by that. Anyway, the counselor told me she couldn’t help me further at that point, and she gave me no guidance on how to proceed.
I went through phone tree, transfer, and wait time hell again, and I ended up at Berkeley Medical Group. I explained to them that I had qualified for the charity care program, no one had explained the two-bill concept or provided me with any alternate charity forms in the ER, and that I had been unaware that I had an outstanding bill until it had gone into collections. I was given the address of somebody in Washington State to write if I want to dispute the bad debt from 2001.The Berkeley Medical Group representative told me that they have no charity program and the fine print of the third bill warns it would go into collections. She did not seem to get what was wrong with the fact no one in the ER explains the fact there are two separate billing systems or explains steps indigent patients should take beyond giving them the forms for the charity care program. I asked her how I should proceed. She told me I had to deal with the collections agency now, and there was nothing she could do for me. I pointed out that the only thing adding a bad debt to the credit record of a person with no income would do would be to make it even harder for them to recover financially and be insured and/or able to pay such bills in the future. She told me that all I could do was call the collections agency.So, here’s where things stand now. I’m not going to call the collections agency. I went through this with the same agency in 2001 to deal with Alta Bates’ billing mistake, and I know this particular agency, American Capital, has a bad business reputation. I will only be setting myself up for threats and harassment if I call them. One amusing aspect is that the collections agency has been leaving messages on my answering machine: they don’t say who they are, but they give the collections case number and expect me to call them long distance! Anyway, I’m not going to deal with them.
I’m considering filing for bankruptcy. Whether I do that depends on whether I can take care of my student loans at the same time. My student loans might be exempt from a bankruptcy claim because they can always be deferred, but if I can get the loans taken care of that means that bankruptcy for hospital bills has larger ramifications for the U.S. financial system as a whole. I’m sure anyone who has to file bankruptcy for a hospital bill will take care of their other bills while they are at it. The question for me at this point is whether it does more damage to my credit rating to file for bankruptcy or simply ignore the collections agency notices. Which will fall off my credit record faster?  I’m also amazed that Alta Bates has been continuing a practice that’s bound to confuse anyone who comes to their ER. Because of the 2001 billing problem, I know that problems like this have been going on at least that long. Surely I’m not the only person who has brought up that patients aren’t being given all the information in the ER. I’m wondering if there isn’t a Patient’s Bill of Rights violation in there somewhere. Even if there isn’t, Alta Bates and Berkeley Medical  Group end up paying extra administrative costs to hunt down people who were simply confused by their billing system.

This type of foul up is very common.  A friend of mine who was well insured was sent to collections by a local medical center for a bill he’d already paid and was dismayed to find it reported as an unpaid debt recently on his credit report when he wanted to get a mortgage. And I personally just finished getting an unnamed insurance company to pay my final provider bill because they had miscalculated my deductible for surgery I had back last April. The move to more HSAs and forcing more people into dealing with a system that can produce bills from 5-10 seperate providers from one procedure is not exactly going to simplify matters. Horror stories like that of Anonymous’ are going to multiply.

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