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POLITICS/TECHNOLOGY: A photo essay of unnecessary carnage

The war in Iraq recently passed another grim milestone. 1,000 Americans have died in combat. Many of them are national guardsmen who joined up for the college money. Had they been told that they had a good chance of going half way around the world at extremely high risk, you can be sure that many of them wouldn’t have enrolled. A very sad example of that is described in this heart-rending column from N. Dakota and it’s a devastating read.

It goes without saying that this was a manufactured and unnecessary war/occupation, which made us less safe at home and gave a great boost to Islamo-theocratic fascists abroad. Few people have been allowed direct access to the architects of the war and Kerry decided not to take the meager chances he was given to confront Bush, but today some direct criticism was aimed by fighting men stationed in Kuwait to Rumsfeld, to the cheers of their fellow watching troops. According to the ones on the ground, American troops need to dig in land-fill to get scrap metal to use as armor for their trucks. Rumsfeld basically said "screw you" to the troops and told them that "we go to war with the army that we have". So much for all that neo-con false patriot BS about supporting the troops. Rumsfeld doesn’t have to go to war himself and he’s been in charge of getting the troops the right stuff for nearly four years. It’s three years and 10 months since the first cabinet meeting when invading Iraq was put on the Administration’s agenda. Four years, by the way, is longer than the US was fighting in WWII.

Why am I raising this in a health care blog? Partly because the cost of this war taxes not only our humanity, but it also limits our ability to do things at home–the $150bn a year we’re spending in Iraq could have supplied universal health insurance to al Americans by any measure. But also today the New England Journal of Medicine came out with a photo essay to remind us that many of those wounded would have died in earlier wars–we’re just getting very good at saving people. But those soldiers have to live with their injuries for the rest of their lives. And of course multiply this carnage out some five to ten times on the Iraqi side.

The NEJM will doubtless be lambasted by the wingnuts (and some medbloggers) for running this piece. But until the horror of war is brought home to all of us, including NEJM reading physicians who are influential in their communities, then the chances of this occupation ending are slim. Sadly Iraq will continue on into civil war, with or without us.

And more scenes like this will continue, even if no one seems able to plausibly explain what this war is about. (Photos and captions are copied from the NEJM site). I only slightly apologize if anyone is offended.


A common type of injury associated with roadside improvised explosive device run over by a Humvee.


Damage-control laparotomy with temporary abdominal closure

HOSPITALS; King/Drew–putting a failure in context. Part 1

Today’s fourth of five pieces in the LA Times on King/Drew medical center is called How whole departments fail a hospital’s patients and it’s probably the most horrific of the series so far. It starts with the widely reported case of the nurse who turned off the alarms in the ICU and goes onto the pharmacy where one tech worked unsupervised and another stole prescription drugs in bulk to sell out of his garage, to the orthopedic unit where the two most senior physicians were eventually forced out because of gross irregularities that appears to be outright fraud, and even to the family practice resident who preyed sexually on patients and eventually murdered one. Previous articles in this series have followed doctors around and found that they appeared more or less when they like, but were clocked in for time they were not at work, and showed that the funding for the hospitals and its associated residency programs has been far more than for comparable public hospitals in California.

To put it mildly, this hospital has failed in its mission. But there is one thing that is barely mentioned in the article and it’s the extremely contentious issue of race. King/Drew was formed out of result of the Watts riots in the 1960s, and was designed to be the pinnacle of inner city health care. This hidden implication is that the race issue really matters, with the implication that this would have never been allowed to happen at a predominantly white suburban hospital. Beyond that the tone of the LA Times articles seems to me to reflect another view, which is that poor, urban minorities are unable to run a hospital properly. This is never expressed clearly in these articles but it seems to be hinted at in the background. Conversely the first article in the series quotes a black physician squarely accusing the LA County Board of Supervisors of racism for treating the hospital unfairly:

"We see something that we fought really hard for," said Dr. Herbert Avery, 71, an obstetrician who helped plan the hospital and served briefly on its staff. "And now it’s being driven down under the ground under the guise that the people out there … they’re black and Mexican and they’re too stupid to run a hospital and a medical school."

It’s obviously beyond the scope of THCB to get into the weeds of what’s wrong at King/Drew and make suggestions as to how to fix it, but given that most of my readers will be as appalled as the LA Times readers about what’s going on there, I want to give a little context as to why it’s so difficult to change the culture. I don’t think that race per se is at the basis of the problem, whether it’s issues between blacks and latinos (as has often been cited at King/Drew) or whites and minorities. It seems to me that an obsession with race seems to be missing some vital points about American society that are ending up reflected in things like the failure of King/Drew.

These group under three predominant areas. 1) the scale of inner-city poverty and its impact on health care. 2) the relationship between community and authority. 3) The management of a large scale health care systems in a world of electoral machines.

More on this in Part 2.

TECHNOLOGY: J&J continues winning diversification strategy

Unfortunately this stock picker wasn’t paying much attention, but there were some signs that this would happen. Last week a Prudential analyst thought that Guidant was the top pick in medical devices, while the NY Times had a story late last week that Guidant had no clear succession plan. (Hint, hint–if no internal successor, perhaps an external one would impose itself!) And now comes today’s news that J&J is going to buy Guidant (or at least is in talks to buy it). The price mentioned in the article is $24 billion, or about $3 billion more than Guidant’ closing stock price of $68. So if it goes through as is we can expect a price of about $75, or exactly where the Prudential analyst forecast. Perhaps we should pay them more attention in the future.

Where does that leave the device business? Guidant is big in bare-metal stents and has a new drug eluting stent coming out in 2007. It is better know for its defribillators in which its a strong second to Medtronic. J&J is strong in stents but needs to get stronger to combat Boston Scientific, and the defribillator business helps it broaden its dependence on some pharma products that will be coming under competition (like is anit-anemia drug Procit).

J&J has always managed to keep its diversified portfolio of companies more or less happily under one corporate organization. mMost other big pharma have basically relied on their dominant therapeutic areas and have treated their other units like the poor relations. For instance SKB’s role in consumer products was never as successful or as central as J&Js, while Pfizer and BMS have in recent memory sold medical devices business because they weren’t core to their business. Guidant itself was a spin-off from Eli Lilly about a decade ago.

Being a diversified health care conglomerate is challenging because some product lines make so much more money than others. Dealing with Procrit, stents, diabetes test strips and Splenda (not to mention baby powder) under one corporate roof certainly requires different management skills than big pharma usually exhibits, and it lowers the overall margins in the boom times. But when times are tough, it’s clear though that J&J’s diversification strategy has its advantages, given that it’s the only pharma stock to have actually gone up this year–up 20% compared to Pfizer for example which is down 20%. From that perspective Guidant looks to be a good, if somewhat pricey, addition to the J&J steamroller.

HOSPITALS: Trying to put King/Drew in context

There’s a really interesting series in the LA Times about King/Drew Medical Center.  The first article is called Deadly errors and politics betray a hospital’s promise, and the second is called Underfunding is a myth, but the squandering is real. Things are not good at King/Drew and have not been good for some time (possible since its founding). However, there are some reasons why that’s the case. Furthermore, (in a mostly unspoken way) this is somewhat being reduced to an issue about race, with some pretty negative connotations being made. And there’s a lot more to it than that.

I’ll say a lot more about this later in an attempt to put both the health care and the politics in some context, but for now go read the articles. (Apologies to my Monday readers but I’ve been crunched on something else the last few days).

PHARMA: Cynical thought for the day

On December 8th medical students across the nation are going to protest overly intrusive marketing from drug reps. I can’t help wondering that, given the relative geekiness and terrible work hours of medical students/residents and the typical physical characteristics of detail babes reps, isn’t this a somewhat excessive piece of self-sacrifice?  Where else are they going to meet hot chicks/hunky guys?

PHARMA: Atlas is not impressed by the Illinois reimporter

Regular contributor, and one of several token free-marketer contributors to this deeply socialist blog, Atlas, does not like what he sees from the apparently failing effort of Illinois governor Rod Blagojevich to enroll anyone in the campaign to buy drugs from Canada.

Today on our local NPR outlet, Rahm Emmanuel (D-IL) was asked why the Illinois reimportation juggernaut had only signed up 1,200 Illini. His answer–well, we don’t have the money to advertise it. Hello? Where does he think big pharma gets the ad budgets that the great state so lusts for? From charging more than the cost of chemicals in Ireland and the UK, that’s where! Guess "great" ideas don’t sell themselves, eh? Well, guess what? Neither do great medicines! None of this stops our intrepid Governor from exporting his import fiasco like a dangerous contagion to other demagogues in charge of unfortunate states–Kansas is the latest victim. One wonders how much all this interstate politicking costs the taxpayer.

Later on the same program, Dr. Quentin Young (a former Cook County health commissioner and academic who is no friend of pharma) acknowledged that although AIDS is a pandemic worldwide, it is reduced to a chronic condition domestically. By what? Pharmaceuticals!

Meanwhile, while our Governor traipses across the fruited plain running for VP on a Clinton 08 ticket or whatever it is that he is trying to accomplish, Illinois Medicaid (which funds real FDA approved drugs for the needy, including many AIDS sufferers) is criminally underfunded due to the Governor’s foolish pledge (reminiscent of Bush the Elder) to never raise taxes regardless of how much his pharma bashing campaign accompanied by a bloated and corrupt security phalanx drains from the treasury. What’s more, having gambled and lost on the Presidential election, IL now faces the spectre of Federal retribution for its flouting of law and FDA regulation prohibiting reimportation in the form of denial of a Medicaid tax and spend maneuver that it was counting on to plug a multimillion dollar hole in the budget. What comes around, goes around.

Those of us who retain some semblance of sanity and economic literacy here in the Land of Lincoln can hardly wait to lose this loser of a Governor. Wish us well.

I did have to respond to Atlas because the hint of sanity, or at least of not running up a huge deficit just to avoid a tax increase, was implicit in his rant. And that gets us close to the ultimate heresy among Republicans of calling for a tax increase (even if George HW Bush’s tax increase did set us up for the party that was the 1990s). Atlas responded:

I can’t speak for the Republicans (I’m an independent you know). But if you’re going to write a check you’re going to have to cash it. Politicians of every stripe these days seem to be incognizant of this. Even Democrats won’t raise taxes in some cases, and Republicans seem to think deficits don’t matter. To some extent they may have a point (leveraging and all that), but at some point common sense dictates they do matter, and I think we’re getting there.

I think low taxes are good in that they stimulate the economy, and rates prevalent in the US and UK in the 60s (70%-90% at the highest marginal brackets) are counterproductive, except in that they inspired the Beatles to record "Taxman". But many people, I among them, would not object to paying more taxes if the money was really used for practical solutions to pressing problems.

The trouble is much of the money is wasted on corruption and folly. Having grown up in Chicago, I can assure you that many if not most of our tax dollars are wasted if not outright stolen by featherbedders and mobsters. So social reform must be accompanied by political reform, or many will trust in the private sector as the least worst vehicle for good works.

So there really is some dissension on the free-market right from the Rove-Bush-Cheney "deficits don’t matter" orthodoxy. Perhaps Atlas and I will be burnt at the same stake?

   

QUALITY: Wachter agrees that patient safety is only marginally improving

Somewhat beating a dead horse, five years and one day after To Err is Human, UCSF patient safety expert (and by definition rebel physician) Robert Wachter has a paper in Health Affairs in which he (using a survey of 400 hospitalists) grades the US health care system’s efforts on the patient safety issue. The press release notes that he "gives the U.S. health system an overall grade of C+ on patient safety, noting some improvement but considerable deficiencies in key categories." Especially as the only category that patient safety gets an A grade (albeit it an A minus) is in the regulatory sphere. I don’t think that THCB’s commentator of earlier this week Michael Millenson would be so generous with his grading. As he said in his piece in THCB on Monday, "As the horror stories fade, Congress can barely summon the energy to mandate voluntary error reporting." Wachter is impressed only by JCAHOs regs on checking orders and the impact of the emerging role of hospitalists.

Here’s the full paper, and it doesn’t really make for encouraging reading.

POLICY/INDUSTRY: Costs — The rate of increase decreases, but not enough to spoil everyone’s party, with UPDATE

There’s a confusing little piece in the WSJ about how health spending continues to rise at (a) worrying pace. It’s based on a HSC report and an EBRI report about the first half of this year, which suggest that last year’s trends are continuing. Incidentally neither of those reports seem to appear on those organizations’ websites for us mere mortals. The report is now up on HSC’s site,(although perhaps the SEC should be investigating how the WSJ got it early?) However, last year’s trends were a slowing to a mere 7.5% increase, which is only a little over double GDP growth. Anyway this is pretty much in line with CMS’ projection of a 7.8% rise in costs for 2003. A more nuanced observer might notice that it’s during recessions when we have double digit health care cost growth (e.g. 1990-2 and 2001-2) that the healthcare as a share of GDP number really takes off. The rest of the time it just continues a slow snake-like growth upwards. But this isn’t stopping the WSJ from panicking:

The finding suggests that health costs may continue to increase at unmanageable levels for employers and consumers. That outlook is distressing, because until recently the rise in health-care costs had appeared to be decelerating. The flattening of health-cost increases suggests health-insurance premiums will continue to rise at a similar pace.

But of course if you look in the other part of the WSJ you might notice that yesterday was a pretty good day for one part of the health sector–the insurers. Part of that was more irrational exuberance about the finalization of the Wellpoint/Anthem deal. But part of that increase was a big bump in the numbers and forecasts for Humana and Cigna and even bigger jumps in their stock prices. (Incidentally, can anyone else remember a merger going from final government approval one day to immediate ticker symbol transfer and final merger the next? I can’t but that’s what happened and Wednesday WLP stopped trading and handed its symbol over to ATH, which–now called WLP–went up another 7%!).

So if you were concerned about where all those extra premiums are going, don’t be. The health plans are looking after them very well indeed!

UPDATE: And if you needed proof of the frugality of health plans, Bill McGuire, CEO of United, is cashing in $114m in stock options, barely more than the $94m in total comp he had to scrape by on last year. Do you ever wonder if the tough captains of American industry ever stop to think that the more they are asked to pay for health care, the richer the health plans seem to get? Is that how generously they treat the rest of their suppliers?

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