Joe Padua has a new-ish blog called Managed Care Matters and there’s a new team blog on the ills of the health care system by a group of academics called HCRenewal. Both worth a look!
Above the Fold
PHARMA: Don Johnson on how to save Merck
I’m not sure Merck is salvageable. My assumption is that its sales force is worth something, as is Fossamax, and that a shotgun marriage with another pharma with a better pipeline is in the offing. But Don Johnson from The Business Word gives Merck a gazillion dollars worth of consulting on how to make the turnaround, and seems to be doing it for free! An excellent analysis from a savvy business observer. Someone in New Jersey should be reading and getting Don on a plane at a high fee. I’m not sure anything can work to save Merck as it faces post-Vioxx and Zocor going off patent, but many of his ideas are well worth thinking about.
POLICY: Medicare dis-Advantaged?
A couple of weeks back I suggested that the Medicare CCIP (disease management) demonstration projects were designed at least in part to get private health plans (and the DSM companies that contract with them) involved in the wider management of Medicare FFS patients. The Oliver Stones amongst us think that this is part of a logical attempt by the Administration and its Congressional allies (perhaps I should just start calling them "the Government") to fast-forward the privatization of Medicare. Now a somewhat renegade ex-CMS employee, Robert Berenson of the Urban Institute, has a paper in Health Affairs that accurately recounts the history and likely future of the other larger part of the privatizing Medicare equation.
Berenson shows that, essentially, private plans are being bribed back into Medicare Advantage (the new name for Medicare plus Choice, nee Medicare Risk) with payments that equate to roughly 108% of the equivalent per capita cost of a senior in traditional Medicare. In addition Medicare is introducing regional private PPOs even though:
The traditional Medicare program has enough market power to impose administrative prices on providers at rates that are generally lower than those of commercial PPOs. Medicare beneficiaries already enjoy broader freedom of choice, with limits on balance-billing, than in most PPOs. In other words, the main virtues of the PPO model in commercial markets are not applicable to Medicare, which itself functions in many ways like a PPO.
In addition to the private PPOs, and the improved terms for the private Medicare Advantage plans, the new Part D which will be run by a different set of private actors, the PBMs. And of course many of the most expensive and sickest Medicare patients will be in the CCIP programs which will be expanded if they prove successful, and have been set up to give at the least a very good chance of success. So when private sector Medicare has shown little skill at implementing cost control in the past, why is it being encouraged so much now? Part of this is the ideological preference of the Republicans to see the market work and the government fail. But there’s more than that going on.
Former CMS administrator Tom Scully argued that one main purpose for creating an extensive network of PPOs in Medicare would be to decrease the market power of the traditional program yet to replace it with nongovernmental insurers, which themselves might have sizable market power. In his view, private monopsony payers would be unencumbered by the political interests and regulatory requirements that arguably restrict the flexibility of the traditional Medicare program to act decisively to reduce spending and to respond to market-specific factors related to quality and access.
In other words, if Medicare is going to be reformed–and yes I agree it needs to be–the Administration believes that the government itself can’t do it. It’s just too political, and the interested parties will resist any significant reform or price cuts. Those interested parties are of course largely America’s providers who have indeed grown fat at the Medicare trough over the last 40 years. Instead the Administration’s hope is to hand it off to a gang of private enforcers who they hope will be as successful with reducing cost in Medicare as they were for their private employer clients in the mid-1990s.
There are of course several potential pitfalls with this approach. First, in order to increase the numbers in Medicare Advantage from the current 12% to a percentage where their weight of numbers might have some impact, the bribes paid to the private plans are (and need to be) rather substantial. In order for the program as a whole to be reformed by the private plans rather than directly by CMS, many, many more seniors have to be tempted into Medicare Advantage. However, although some good policies like real risk adjustment and competitive bidding have been included in the legislation and are due to be implemented in the next couple of years, the current way that they’ve been set up doesn’t really encourage plans to cut costs–rather it will likely result in them pricing to a benchmark that CMS sets. Of course that benchmark and indeed all payments from CMS are vulnerable themselves to yet more political interference. And if the amount of the bribes start going in a direction that the private plans don’t like, well we’ve seen this movie before in 1999-2002 when lots of plans took their ball back and went home.
Secondly, the biggest likely interference will arrive should the so-called conservatives in the Congress remember that being a conservative is supposed to be about reducing government spending. The argument which goes that "we have to increase Medicare spending now in order to put a structure of enough private plans in place so that they can cut spending at some unspecified future date", may not hold much water if Congress ever decides to look at the deficit seriously. Of course if you really want to cut Medicare spending and you can muster the political will to do it, doing it by reducing the amount you pay providers in the traditional program is the most effective way. After all it worked pretty well in 1998-2001. And if you grow the private plan side, instead of having a group of voracious cost cutters, you may just end up with a group of Mr Ten-Percents in the middle who also need to be taken care of politically and will have more power to ensure that they are. It can’t have escaped everyone’s notice that health insurers actually have done better financially in times of big cost increases rather than when they were slashing and burning provider rates.
Finally there are two other sleeper issues with Medicare that shouldn’t be forgotten. One is Teddy Kennedy’s overriding concern that increasing Medicare privatization combined with the (admittedly limited) means-testing for Part D introduced in the MMA will lead to a de-facto defined contribution mindset. He foresees Medicare eventually paying a flat rate voucher for seniors’ membership of plans, and as that amount is cut over time, you’ll see a distinction between the class of private plan for different Medicare recipients, based on whether they can afford bigger premiums out of pocket. Kennedy’s eventual fear is that the "contribution" eventually becomes regarded as a kind of welfare payment. And we all know how the public feels about cutting back on welfare. There are certainly influential Republicans (Grover Norquist is one who wants to "drown government in a bath tub") who regard that as a legitimate end-game.
The other issue is one that Ross at the sadly quiet again Public Health Press has raised many times. Hidden in the MMA legislation is a provision that if Medicare premiums for Part B no longer cover 50% of Part B costs (and that money has to come from the general taxation) benefits/payments will be cut until the premiums do cover 50%. In other words there’s a self-limiting mechanism built in which will likely mean that seniors will end up paying more to get less.
If I had to make a tenuous forecast, my suspicion is that the payments to Medicare private plans end up getting reduced sometime in the near enough future that they never obtain the critical mass that Scully and others want them to get to enable them to reform the system. I believe that the future of Medicare is a fairly straight fight between providers and taxpayers, with an increasingly aggressive CMS pushing P4P and attempting to reduce regional spending variation using the fee-schedule as its main weapon. But trying to privatize this process to stop it being political, well that just sounds un-American to me! Anytime the tax payer is forking over several hundred billion dollars, the process will indeed remain political.
QUALITY: Is pre-chemo testing the future? by Harvey Frey MD
Careful readers of this blog will have noted that along with reporting about the change in reimbursement for cancer drugs (and to get the real scoop on that you should see JD Klienke’s excellent article in Health Affairs), there’s also been a trend generally in favor of chemo-sensitivity testing before chemotherapy–largely considered a fringe activity by mainstream oncologists. Then this week the NEJM had an article generally in favor of pre-chemo testing. Did the appearance of this article mean that oncologists were moving the way of the pre-chemo testing radicals or did I as the dumb layman misunderstand it? I asked Dr Harvey Frey, who has written for laymen on this subject for THCB before but has generally not been in favor of it, what he thought.
I think you’ve got it right.
Now oncologists guess at prognosis and probable effective treatment based on how a cancer looks under the microscope, how extensive it is when found, and some blood tests. But even within the groups they’ve determined that way, there are still huge variations in actual patient response and survival rates. Since they never know who needs the treatments for sure, many patients are treated who might not need the treatment, and some get ineffective treatments before finding an effective one, and since the treatments are not innocuous, that’s bad.
They first tried doing sensitivity testing by growing cancer cells with different chemotherapeutic agents. For a variety of reasons, that never was very helpful. For years they have thought that, if only they could determine the actual genes responsible for cancer, they could break down the large heterogeneous groups into smaller groups with better defined responses, and spare many patients any treatment at all.
This study is a start toward that end, but still a small step. The technique doesn’t require that they try to grow the cells, but can be done on regular biopsies as obtained now. But so far all it’s shown is a correlation between their test and survival. They haven’t yet shown that they can predict response to hormones or chemotherapy. But there’s every reason to hope that they will ultimately be able to make such predictions, at least with better accuracy than we can now.
THCB UPDATE
Sadly, no posts from Matthew over the next few days. He’s on his way back to the UK for the holidays and having laptop problems, so his latest series of missives will be delayed.
BLOGS: Italics for anyone?
For some strange reason Blogger would not publish for hours today. And then when it did, everything became italicized…..sorry! (Unless you like it that way!)
PHARMA: Fee-based distribution
Pharma wholesalers used to make their mark-up on tiny price changes. Like a Walmart, they’d buy now, sell later and pay their suppliers even later. As the suppliers were the hugely profitable pharma companies who made huge margins on each product, they weren’t too bothered about their downstream distributors making money by financial manipulation. Add to the equation that prices were going up 10% a year, distributors were making even more just by holding inventory. But it was always a low margin business. The big three (Cardinal, McKesson, and AmerisourceBergen) have vast revenues but relatively tiny profits. In 2003 Cardinal made $1.5 billion in profit, on $51bn in revenues. Not bad, but its biggest upstream supplier, Pfizer, made $11bn on $32bn in revenue.
Now distributors are having problems with their old model (in part because drug prices aren’t going up as fast). They are now trying to move to a fee-for-service model for distribution. Here’s an interesting report as to whether that’s going to work. The answer seems to be, maybe.
HOSPITALS/POLICY: Matt Quinn on California staffing ratios contention
Last week our beloved Governor must have thought that he’s wondered into a John Leslie movie. 3,000 nurses protested his visit to a women’s conference (no less), and he told his audience that "I kick their butts" and that nurses–the most trusted people in the health care system–were "special interests". Oh and by the way this was at a conference in which CEOs who contributed to Schwarzeneger’s campaign were allowed to actively promote their own companies. While I resisted the temptation to use the headline Arnie takes on 3,000 Nurses, Matt Quinn doesn’t want this to slip by THCB:
Don’t think that you’ve covered the Governator’s decision to repeal CA’s mandatory nurse staffing ratios. The reality is that most hospitals can’t (consistently) meet them . . . which speaks to the acuity of the nursing crisis in this country (and especially CA).
While I certainly believe that most hospitals can do a much better job of allocating nursing resources (and some are using "bidding technology" to do so), there simply not enough nurses being produced . . . or staying in the profession.
Instead of encouraging hospitals to fight (and spend more money on bonuses, etc.) to recruit away nurses from other organizations in their areas by mandating ratios, it makes sense to increase the supply of nurses. There are lots of ways that the state and federal governments can make this happen . . . if it’s a priority. Arnold so far doesn’t seem to feel that this is a priority.
While Linda Aitken and others have done great research on correlating staffing with mortality, complications, etc., there remains too little effort in giving individual healthcare organizations the tools that they need to effectively (and empirically) balance staffing with quality, safety, satisfaction, and cost. "Standard" nurse to patient ratios represent too blunt a tool for this.
Ask any nurse (or hospital risk manager) and you’ll find that staffing is at least a contributing factor to the vast majority of medical errors / mistakes. Hurried people make mistakes . . . and can’t provide patients with the care and compassion that they deserve. Hurried and overworked people are also unhappy. While I applaud the (currently under funded by highly emphasized) efforts to implement IT as a solution to patient safety, having enough nurses (or clinical workers) should rank as high or higher…
There have been some pretty good articles about this in the Sacramento Bee of late.
QUALITY: Gordon Norman on DSM, Medicare and Oliver Stone & me
Last week there was remarkably little fuss in the health care press about the introduction of the new Medicare CCIP (DM-type) programs. I suggested that provider groups had been left out of the running when these programs were awarded. Gordon Norman, who runs DM at Pacificare and has contributed an excellent article on DSM to THCB in the recent past, and I agree that few provider organizations in the US would be able to run these big DSM demonstration projects, and that even fewer provider groups base their business on a preventative care and population-health coordination model (for the good of their own fiscal health). But I went further in suggesting that the ideological bias of this Administration and Congress was for private plans and organizations to solve the future issues facing Medicare, rather than the public program creating its own initiatives, or working with predominantly non-profit providers. No one would seriously disagree with that, but my connection of that fact with the non-appearance of providers or non-profits on the list of CCIP award winners has caused Gordon to disagree. He writes:
I have to call "Foul!" on your conspiracy theory…
It’s not evident from your blog entry today that you are aware of the latest DM Demo offered by CMS expressly targeted to providers and consortia where providers would take a lead role — the CMHCB Demo. (Here’s more detail on the CMHCB). Far from being the case that providers are "locked out" of the DM groundswell — if providers (remember, I am one of the guilty here) had manifested a sufficient collective will and effort to design a health care system that is primarily patient need-centric, then better integration of chronic care for patients, among providers, over time, across sites, among comorbidities, and embracing the biopsychosocial model might already exist and have obviated the need for a "DM industry" in the first place.
I can imagine my medical colleagues lamenting: "If only someone had accountability for that system’s performance (like oft-maligned executives in the managed care?), perhaps faster progress would be possible." As it stands now, it’s much easier for those who comprise our system to stand on the sidelines, as if helpless, and criticize others who are attempting to fill the care coordination vacuum of their own creation. At its best, DM is an "aftermarket fix" that can work surprisingly well under the right circumstances — that doesn’t mean it is superior to an "factory installed" integrated approach to better chronic care management by health care providers. "Systemness" is a fundamental property that is largely lacking in our health care system today, contributing to an inefficient, expensive, unfriendly, frustrating, and mediocre quality ecology for U.S. healthcare. When are providers going to become responsive to this obvious and growing need as an organized force? We’ll see how many line up for the CMHCB demos — I personally hope there are many and that they do well, since the DM need requires a very inclusive "DM tent" to address the gap between actual and ideal coordinated care. (And just wait for the Boomers…)
By the way, CMS made a commitment to those conducting the BIPA DM Demonstrations that it would not establish competing DM demos or pilots in their regions (e.g., CA, AZ, TX, parts of LA) which would jeopardize the results of this critically important DM study that will provider policy makers (CBO), advocates, and skeptics alike with rigorous RCT DM outcomes at least 1 if not 2 years in advance of the CCIP results. This was neither an arbitrary, capricious, or political decision, but rather a responsible approach to conducting a demonstration study without contamination that would confound the results.
Now I admit that my expertise on the finer points of CMS demonstration programs is limited, and I asked Gordon to confirm for me that the CMHCB awards are way smaller than CCIP and getting a much lower profile. Gordon stresses that CMS has reserved these for providers and that that’s the point!
Yes, the scale is different for CMHCB per award (though no specific limit on # of awards), somewhere between 800 – 3,000 depending on several factors — but that’s the point: it was designed specifically for providers. How many provider groups do you think could amass a patient population that would provide more than 3,000 Medicare FFS patients (HCC scores >2.0) willing to voluntarily participate in such a program with a 6 month recruitment window? Not many.
BIPA is 30,000 total enrolled maximum (+ another 12,000 controls which awardees also have to recruit, unlike CCIP or CMHCB design).
You and Mel Gibson and Oliver Stone should get together on the movie…
I told Gordon that if we were going down the Lethal Weapon path I’d rather make a movie with Danny Glover, and that anyway Michael Moore is already making this movie apparently. But slightly later I got a little more information from another of my DM sources, suggesting that there is trouble with the physician group practice demonstration. Apparently provider groups are dropping out from applying because OMB has changed the payment incentive formula. This is for one of the CMHCB demos that Gordon was talking about, and it looks like it’s in big trouble in advance of the award being announced. This is unconfirmed scuttlebutt and I personally don’t have the time to check it out, so please let me know if you can confirm or deny. But if true, it’s an interesting story, and adds a little fuel to the conspiracy theory fire about the Adminstration tilting the DM demonstrations towards the people it likes.
Paging Mr Stone…….
POLICY/ETHICS: Follow up to the Dutch euthanasia issue
Well I’ve spent some time emailing with Sydney at Medpundit about her original article and she’s also received support from Enoch at Medmusings and Dr Bob at The Doctor Is In. All three are coming at this (I presume) from a Christian "faith-based" perspective and so there may be no possibility of them agreeing with a secular humanist like me. But let me detail my correspondence with Sydney and make one more attempt.
Last Friday after she had said that the Dutch doctors were the moral equivalent of those committing genocide in Bosnia, the Sudan and Nazi Germany, I called in this post for Sydney to retract her words. My argument was that this was a profound disagreement among well-meaning people, and that equating the Dutch with totally malevolent people was a) incorrect and b) insulting. I also argued that there was no specifically rational or moral difference between ending care and feeding of a terminally ill child causing its death, and actively causing the child’s death by, say, overdosing it with morphine. You could quite reasonably argue that this was kinder for the child as it reduced its suffering. And, as I showed using recent poll data, the former activity is accepted medical practice amongst pediatric specialists in this nation–just as highly regulated euthanasia appears to be becoming in the Netherlands. (As opposed to the unregulated, unstated euthanasia that’s been practiced by many physicians in many countries forever).
Note that I am not trying to convince Syd (or Enoch or Dr Bob for that matter) to change their views. What I am objecting to is anyone saying that someone who disagrees with them (and acts accordingly) on this type of highly-charged issue is as evil as a human can be–there is no worse crime than genocide. Syd responded:
I disagree. You’re assuming some innate goodness on the part of the Dutch that would prevent them from killing others that they find too much of a burden, and/or some innate evil on the part of the Sudanese and Bosnian Serbs that allows them to kill normal adults they find burdensome. We are equally human and equally subject to moral failings. Once a society has decided it’s acceptable to kill those that are a burden, then any troublesome group is fair game. The only distinction between the Dutch, the Bosnians, and the Sudanese is who they define as a burden. And history has shown us more than enough that that definition belongs to whoever holds political power.
I responded to Syd by saying that "there is one absolute difference. The Dutch physicians believe rightly or wrongly that they are doing what they are doing purely because they are preventing the children from further suffering. They do not believe they are doing it for their own advantage–that’s your (mis)interpretation of their actions. The Sudanese/Serbs/Germans who commit genocide are doing it for their own perceived advantage and have no consideration of any kind for their victims.
There is also one relative difference. If you withdraw care and feeding from a terminally ill child with no prospect of recovery, it will die sooner than if you don’t. If you euthanize a terminally ill child the same is true. It’s a reasonable position to equate these positions morally, and if you do that then many, many physicians (as shown in the poll on my blog) are guilty of the same act. According to your logic, they’re all the same as those committing genocide.
If you cannot logically defend these points you should withdraw your remarks."
Sydney replied:
Active killing is active killing, regardless. The Dutch doctors may tell themselves they’re doing it to end the suffering of the children, but truthfully, there’s no indication that children with neural tube defects have pain just from the defects. They do have long, complicated roads ahead of them, however. The Dutch are making the decision for the children that those are roads best not taken. (According to press reports the physicians make the decision without even taking into consideration the parent’s wishes.) Take it from someone in the profession – doctors make those kinds of decisions most often based on how much of a hassle factor it will be for them, rather than the patient.
Here’s another example. In Germany, before the Holocaust, it became acceptable practice to euthanize mentally handicapped children. The doctors convinced themselves it was OK to do so because the children were too restless and unmanageable. They would put them down to put the "poor idiots" out of their misery. In truth, it was the doctors’ and nurses’ misery that was being eliminated. It wasn’t so much the patient’s condition that was the real problem, as it was the medical profession’s inability to manage their conditions properly.
It was not so long ago that people with even mild physical handicaps were treated as non-entities, even in this country. They were often locked away in their homes by their families. That’s still better than being euthanized out of pity, I suppose.
I guess that’s the difference between the two of us. I’m unconvinced that the Dutch doctors kill infants for completely altruistic motives. You are too willing to take them at their word.
I certainly won’t withdraw my remarks.
On a somewhat trite level it’s easy to refute Syd in this particular case. The Dutch hospital has set up a special protocol, consulted parents, judges and lawyers, and invited controversy including attacks like Syd’s from far and wide on the personal morals of those involved and their national character, all allegedly in her view to save themselves from the "hassle factor" of letting, so far, four children die by withdrawing care and feeding. I know in which course lies the "hassle" and it’s not in the withdrawing of care and feeding. Furthermore, Syd has convinced herself that because she’s seen doctors take those type of decisions for reasons of their own comfort–you see it happens here too–that the Dutch doctors must be doing it for that reason. She also hasn’t bothered to try to logically untangle the relative difference between causing death by action and causing death by deliberate inaction. She just says "active killing is active killing". Similarly Enoch says:
I think there’s a huge difference between allowing a person to die off of life support, and actively ending the life of the person. It’s true that it’s an action to take a person off of support, but that’s morally acceptable to me, to remove life support from a terminal incurable process that will inexorably lead to death soon. Removal of life support is completely different from an action promoting and accelerating death and altering the natural course of disease.
None of them come up with a "why" as to there is a difference. In their view it just is (based presumably on their interpretation of their theology), and that’s that.
Sorry guys, but that’s not good enough. You are all supposed to be scientists and scientists are supposed to bring reason and logic to bear on problems. You may well be right, but you have to at least attempt to prove your case.
But it’s accusing the Dutch physicians of moral equivalence of genocide that is not acceptable. Let me give an analogy. A while back there was a huge brouhaha when two of some 1200 amateur made videos commercials submitted in a contest to Moveon compared Bush to Hitler. As soon as Moveon realized this, they took them out of the contest, and they were rebuked (rightfully so in my view) by both the Republicans and the Democrats for not weeding the commercials out earlier (even if hardly anyone saw them). Now, if you really wanted to, you could draw a parallel between Bush and, say, Stalin. Bush has ordered the indeterminate detention without trial of at least two American citizens. Is he as bad as Stalin, who had thousands detained without trial and tortured and killed? The ACLU (of which I’m a member) has vigorously opposed these detentions (and those of several hundred more non-citizens) as being opposed to fundamental human principles of due process (not to mention the Bill of Rights). However, no reasonable person would suggest that what Bush is doing equates him with Stalin, even though indeterminate detention without trial was a hallmark of Stalin-ist totalitarianism. Whether you agree with him or not, Bush (and his administration) seriously and sincerely believe that the relatively limited numbers of detentions carried out are essential to protect the United States and its citizens. No serious historian believed that Stalin’s use of those tactics (and much worse) was anything other than a means of crushing any possible opposition.
By equating the Dutch physicians with the genocide seen in Rwanda, Sudan, Bosnia and Nazi Germany, Syd and the others are doing the equivalent of saying that Bush is the same as Stalin. That’s what’s so offensive.
