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QUALITY: Betsy Lehman redux, patient safety crisis continues

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I was gobsmacked when I heard this on the local news today. A patient at San Mateo Medical Center (San Mateo is the small county immediately south of San Francisco and north of Silicon Valley/San Jose) died after being given 10 times the correct chemotherapy dose. We all know that medical errors are a problem that still exists, but this error was exactly the same as that which killed Betsy Lehman, the health columnist of the Boston Globe at Dana Farber cancer center in 1994. Betsy’s death was part of the groundswell that ended up 5 years later in the IOM “to Err is Human” report.

Nearly five years after the report and ten years after the tragedy in Boston, it’s clear that this is still a frequent occurrence. San Mateo Medical Center will hold an enquiry, but it’s almost certain that a miscommunication between the nursing, medical and pharmacy staff, without adequate process or technology back-up systems, is to blame. And there’s been plenty of time for the health care system to call attention to that, but as Michael Millenson says it’s mostly been silence.

POLICY: The Wall Street Journal likes HSAs in theory, but they’re in trouble in practice

Surprise, surprise the intellectual geniuses at the Wall Street Journal editorial pages have decided that they like the HSA concept and that HSAs could help address problems in the U.S. health care system. Well they are entitled to their theoretical opinion, and they are right in that the unfair tax treament of health care insurance purchasing should be rectified. There are unfortunately two major problems with their views.

First, the way that tax break should be rectified is to remove it from everyone not extend it to those who don’t get it now. There is no reason that health care premiums should be bought with pre-tax dollars (and for that matter there’s no reason that housing loans should be too). It’s a fundamental violation of that free-market that the WSJ claims to support–not that many of its conservative fellow-travelers are very interested in it these days. It also means that we spend marginal dollars on health care when we should be spending on something else. But I guess they missed that day in micro-economics class when MR=MC was brought up. In reality it means that Americans take their marginal compensation in health care benefits rather than in taxable income–and this amounts to a direct subsidy to higher level taxpayers (the rich) from lower level ones (the poor)–but it amounts to the same effect.

Secondly, while the theory of HSAs may look all very nice, in practice they are breaking down in the only place that’s ever really used them. That place is the directed free-market dictatorship (with a human face) of Singapore. What’s happening to HSAs in Singapore? Well funnily enough according to the Health Minister Khaw Boon Wan they’ve encouraged risk-shifting and cream-skimming:

There are now 15 other providers of a similar medical insurance scheme, causing the risk pool for insurance to be fragmented. Instead of competing to provide better services at lower premiums, Mr Khaw said private providers are cherry-picking by providing coverage to certain groups only to maximize profits.

Does this sound in the least familiar? Could you possibly imagine that kind of behavior amongst American insurers, which might, just might, not be quite as well-behaved or as subservient to the government as their Singaporean brethren? I suspect so, and that’s why Kaiser Permanente is getting aggressively (for it) involved in the campaign against HSAs, partly by advertising loudly this press release about a study its researchers did using Humana’s data. The study, which was published a few months back in the journal Health Services Research and has been featured before in THCB, concludes that a CDHP offered to Humana employees attracted enrollees 25% to 50% healthier than those in traditional plans. Kaiser of course can’t just create another insurance product without taking money out if its own risk-pool. So CDHP/HSAs, and the prospect of the adverse selection death spiral they bring with them, terrify Kaiser–as they should.

PHARMA: The real debate behind reimportation

So to continue from last week’s rant on reimportation, I got an email from the subject of the rant Stephen Chang. (And correcting something I said in my original post Stephen’s group does have a website Cures California.org (I just couldn’t find it easily on Google). Stephen wrote to me saying:

My you get upset easily! I certainly understand your points and the panels and probaly agree on some of them. However, uncontrolled illegal importation from Canada via trans shipments is not the answer. This will potentially make the issue worse as we will jeopardize our own fragile drug supply. I too have been looking for that answer in how to increase access to drugs and fully agree that something needs to be done. Do you have a sensible plan/policy that could be a win-win for everybody? Would love to hear about it

So I thought about this for a while, but before I spell out my ideas it’s worth noting that many people within the pharma business have serious problems with the industry’s stance. Don’t believe me? Take a look at this thread on the pharma-marketing list-serv about pricing, and look at this opinion piece by Pharma Marketing editor John Mack. John says correctly that ‘Pharma needs to realize that it just can’t “win the argument.” ‘ John also has two excellent articles on both the crisis in professional detailing and (on p 10) about better models to target physicians. There are also stories in the Pharma professional press on how high prices are hurting compliance (i.e. sales). This is all by way of showing that the industry has many sympathetic friends and even big-time supporters who feel that it has lost its way. So this is my reply to Stephen–it’s the closest I’ll ever come to trying to get big pharma to find a “Third Way” out of the mess it’s in.

Stephen–I don’t mean to get angry with you in particular, but you said one or two things on the show that I’m afraid were the straw on the camel’s back, following a year or two of me listening to PhRMA fail to make a serious argument in this debate. I don’t think you did yourself or your organization any favors by a) not speaking to the profit level of pharma companies, and — when countered with two GAO reports by your opponent on the show brought up — b) stating that only that research is expensive (“costs hundreds of millions of dollars”) without producing any evidence of its effectiveness or that pharma actually spends that much on R&D, especially when I’d already said in my call that marketing costs are nearly 3 times those of R&D.

However, you are not a professional PR person, you have a real job and a sincere position, so let me try to tell you why I think that your current position is counterproductive.

1) A simple executive order could allow the FDA to investigate and certify as safe a number of Canadian pharmacies, or a number of US based pharmacies that import from certified European pharmacies. Everyone knows that and that’s why the safety argument (or, worse, now the “terrorism” argument) is so disingenuous. Failing to do this when people are importing pharmaceuticals anyway is in fact increasing the risk of safety violations and means that the government’s position (bought and paid for by a short-sighted PhRMA) is actually increasing the risk to the American people.

2) The reimportation issue cannot be that big a deal for the US pharma market. Currently it’s less than $1 bn of a $200 billion market. Even if it went up tenfold it would be less than 5% of the market. PhRMA’s stance does two things. It stops some seniors getting drugs at a decent price (not that many are stopped I admit, but there are some who don’t want to break the law and it means that reasonable people are forced to flout the law). More importantly, it gives the anti-Pharmaceutical left a huge stick with which to beat the industry. More than 80% of seniors are opposed to the ban. Sometimes when you’re that outvoted you have to realize that your position is untenable.

3) The likely consequence of this is that there’ll be a backlash either in 2005 or 2007 or 2009 against big pharma, and severe price controls will come in shortly thereafter. The only people within pharma who don’t care about this are the senior executives of the big pharma companies who are judged on their current quarterly profits. People who care about the creation of new drugs and the availability of those drugs five to ten years out (i.e. you and your coalition) should be concerned about creating an environment in which those drugs for which the efficacy and cost-effective can be proven are available to patients. Currently big pharma’s only trump card is the vast amount of cash it has spent with the Republicans (even if some of them haven’t stayed bought as they can read polls too). That luck will run out sometime –and this November is my guess as to when.

OK, you asked how we get to a better place? I propose three quick measures which wouldn’t cost pharma companies much and would put them in a much better spot.

a) Help the FDA set up a safe channel for drugs from Canada and commit to supplying a decent amount of drugs in a safe import market. I suspect the amount would be smaller than PhRMA fears, and this would remove the number 1 image problem that pharma has.

b) Announce a voluntary reduction in the size of sales forces and marketing budgets, and transfer some of that money into R&D spending, and some into price cuts. This will have to happen anyway, and by getting ahead of the game pharma will be able to control it. Having the CEOs of Schering, Pfizer, GSK, Amgen, etc take a public salary reduction down below $5m from their current stratospheric levels wouldn’t be a bad idea, although it would alert the public to the obscene amounts they get now.

c) Realize that there is a long-term cost problem with health care and set up a system to deal with it. Expecting the rest of society to keep paying more and more into the bottomless pit of health care costs is not only heads-in-the-sand foolish, but it ends up denying access to health care insurance and basic care to millions of Americans. Pharma R&D has some potential to actually alleviate health care costs (the success of Tagamet in reducing ulcer surgery is a prime example, but the replacement of bone-marrow transplant with Gleevac is another). Pharma should be starting a real debate about how as a society we are going to deal with a future of genomics-inspired drugs, and which ones we should be funding. Again if pharma doesn’t lead that debate, the government will in a few years, and it’ll be much less pretty that you and your group would like.

QUALITY: DSM–Alive and kicking?

A while back I wrote about the VA and its care management program and in that post I noted that DSM appeared to be getting bigger but wasn’t sure as to whether it was a big deal. I took that discussion over to the very active DM Forum list-serv and it spawned a great deal of posting, which by now has veered off into the realm of Chaos Theory and non-iterative prisoner’s dilemmas. But in the brief period before the philosophers took over and while it stayed on message there were some interesting responses.

The most interesting was from Al Lewis who’s Disease Management Purchasing Consortium essentially owns the research and RFP-type consulting in the space. As no one else is really looking into this as a research business, I find that to be a proxy for it being a small market. I suggested to Al that as Gartner, Forrester, Advisory Board, Harris, Datamonitor etc hadn’t made much of run at it, as a derived anecdote, it suggested that this isn’t that much bigger an area of focus than it was 5 year ago. Al responded to me that “the field has been growing at 22-25% annually and for 2004 will exceed $800-million (including postacute patient mgmt). “ The recent news that market leader American Healthways has seen its revenue in 2003 grow 35% to $165m probably bears out Al’s estimate. In another reply later he suggested that the internal use of DSM was broadly equivalent to that spent externally. So one can guess that roughly a little under $2bn is being spent on disease management programs. To put it in perspective, if the entire DSM business was a drug, it would be less important than the second ranked Cox-2 inhibitor. You can get much more data and information from Al (although it will cost you actual money–as it should!). He also noted that:

The reason these other orgs haven’t made a run at it (or me) is that I pretty much own the space. The DM companies are private for the most part–I’m the only one who can estimate their revenues because I get their RFPs with average pricing and # members. And in the case of the Advisory Board at least, this isn’t their market–no one on the hospital side will spend a lot of money to learn about this field.

Again that’s all true, but if the market was ten times the size Al would find more competition in his niche. But the bigger question is even if it’s growing relatively fast from a small base, has DSM lived up to its promise of becoming a real market? On this broader point Al writes:

The Disease Management Purchasing Consortium tracks revenues by vendor and has been doing so since well before “Monica Lewinsky” was a household name and I can tell you with drop-dead certainly that the field has been growing roughly 25% a year.

It’s a little like soccer. How, might you ask, is disease management like soccer? Well, when I was a kid all the big tough kids (the ones who were getting to third base in sixth grade but who now mostly sell used cars, or, if they are lucky, quality pre-owned vehicles) played football at school. Our school offered soccer to the rest of us, to keep us off the streets (since we listened to the Monkees, that’s how cool we were, I’m afraid the streets would have had little to fear from our being on them in any case). Well, when one of our parents friends or some other random adult asked what sport we played and we said “soccer” we had to explain what soccer was. Likewise, seven years ago when you said you were in “disease management” you had to explain to people–even people in managed healthcare–what disease management was. Now, even ordinary cocktail-party-type people kinda sorta know. That, my friend, wouldn’t be happening if the field weren’t growing by leaps and bounds.

Now Al’s current style belies his alleged 6th grade wimpiness. I grew up playing soccer in the UK–it’s a real hard man’s game there–and there are plenty of fat, bald middle-aged men limping around London who wish they hadn’t run into a dirty central-defender called Holt in their youth. And for that matter, if you saw the Olypmic women’s soccer final, you might have noticed some pretty rough stuff being dished out by both the Americans and the Brazilians, and The Guardian indicated that the Americans kicked the Germans off the field in the semis. That’s what less talented but very determined teams do to win in sports. (England’s 1966 World Cup Win is a case in point)

However, to return from that little digression, you might think of taking Al’s point about DSM and soccer getting more important in the US together. But it would have been more convincing if it hadn’t been tested by another poster who said that “I was at a cocktail party just last night and happened to mention disease management and the general response from folks was: ‘but, isn’t that what doctors do?’“ David Tinkelman, MD from the National Jewish Medical and Research Center backed up the cocktail party folks:

Some times, people who work in the provision of healthcare services called “Disease Management” forget the reality that this small intervention is but a part of the larger world of management of disease. In that world, the reality is that the principal relationship is between the patient and a physician (not necessarily an ongoing relationship, as in those who primarily seek their care in emergency rooms and clinics). It is in that relationship that medications are prescribed, care is administered,prevention is applied and presumably trust is established. Most external entities who provide “disease management” services do not provide medications directly, hands on care, and take direct care and responsibility of emergency and life threatening situations. These have been and are the roles of the physician community. To believe that outside entities really provide management of disease without direct physician input is putting on blinders to the reality of the healthcare system as we know it in the United States.

But on the other hand Robert M. Ross, MD wrote:

I am not completely convinced that physicians “have” to be the lynchpin in the process. I have been involved in too many DM programs that achieved remarkable results without and sometimes despite physician involvement. However, for those that cannot live without them, there is no option other than Pay to Play programs. Yes, there are some physicians who will strive to do everything for their pts, but for most, it is not practical or financially sound.

So–assuming that DSM programs aimed at patients outside their interactions with physicians can only get us so far–it appears that we’re stuck in a world in which the doctors can’t or won’t get involved, but are needed to make the big changes. So what do the doctors need? Obviously incentives is one thing. But another is technology to support DSM in the clinical workplace. The CHCF had a roundtable looking into IT use in Chronic care management which reported this week.

Funnily enough the report was written by my colleague Robert Mittman who spent the 1990s being the most pessimistic person I know about the adoption of IT in the clinical setting, and may have been too optimistic! The report is an excellent summary of the state of play, and it basically says that in the small to medium sized physician’s practice–that is where most Americans get their health care–we are nowhere. Or rather we are just starting on incomplete disease registries, and hoping the eventually they’ll get built into the ever-coming but not quite here electronic medical record.

Now there is a very important reason that these efforts should continue, and Medicare can help by changing the way it pays for DSM but that’s a tricky process. In the meantime we have more independent confirmation in Health Affairs from Ken Thorpe that 15 big disease categories consumer most of the money we spend on health care, and many of them like diabetes, heart and lunch disease are in the wheelhouse of DSM’s successes to date.

But I hate to remind Al that while around the world soccer is just getting bigger and bigger as a sport and as a business, in the US the women’s pro league folded last year, and the men’s game is a sickly 7th or 8th in terms of TV time and fan importance despite a 1/4 final-round appearance in the 2002 world cup for the men, and sustained success for years for the women. So just because something should be a big deal, it doesn’t mean it is. But let’s hope it will be.

POLICY: Americans apparently prefer Canadian healthcare

Following my article about reimportation on Friday I’ve been having some email chats with some “Canada doubters” (for want of a better word). So I was most amused to get the latest Harris Poll on the topic. The poll isn’t up online yet, but here’s Humphrey Taylor’s take:

With one exception, more Americans feel very positively about their own country than about the other countries. They rate the U.S. Constitution and system of government much more highly than those of other countries. Americans also rate the quality of life, the present government, the economy and the environment in the U.S. more highly than those in other countries – or to be literally accurate, more Americans feel “very positive” about these things than they do about them in Canada or the major European countries. The one exception to their generally more positive views of things in this country is the U.S. health care system.

On five of the six criteria, majorities of adults feel very positively about the U.S., from the 77 percent who feel very positively about the U.S. Constitution and system of government and about the quality of life in the United States to the 51 percent who feel very positively about the environment in this country. Again there is one exception; only 34 percent of adults in America feel very positively about the U.S. health care system. The most striking finding, however, is that substantially more Americans feel very positively about the Canadian health care system (49%) than about the U.S. health care system (34%).

Now to poke a few holes in this (which Humphrey would agree with), it’s fair to say that American’s aren’t exactly too well educated about virtually anything that happens outside the 48 contiguous, and that doubles down when you think about European countries and healthcare systems. For instance, 45% said they felt positive about the quality of life in the UK as compared to only 31% for France and 25% for Spain. I guess good food, great wine and wonderful weather don’t count for much to Americans but while you don’t see too many Spaniards heading to the UK for vacation, there’s a lot of Brits going the other way!

Meanwhile, the WHO has always rated the French and German systems very highly, but only 16% and 12% of the American public do so, while 28% think well of that evil socialized medicine in the UK. Of course the key point of the whole survey is that only 34% of Americans feel very positively about their health care system, while 49% feel very good about Canada’s.

This is important for two reasons. First, it’s probably the only comparative question about health care that Americans can answer from some knowledge base. The word is indeed out that Canada at the least has cheaper drug prices, and the the word is probably getting out that everyone gets “free” coverage there. Second and more importantly, as is framed on the wall in the reception area of the Harris office, W.I. Thomas said, “If men define situations as real, they are real in their consequences.” And the consequence of this perception means more ructions in the American health policy debate, which is gathering speed at a rapid clip.

HEALTH PLANS: Profits up to $10 Billion in 2003, doubling 2002’s level

As if you didn’t know it, 2003 was a very good year for health plans. Weiss Ratings has published a table showing that several, including non-profits Kaiser & Group Health Cooperative of Puget Sound had excellent years. (Although Kaiser’s looked better than it actually was due to an accounting change) Overall HMOs posted profits of $10.2 Billion in 2003, nearly doubling their 2002 numbers. The dark days of 1998 look long gone.

Except that there remains this nasty thing called the underwriting cycle, and we are already seeing premium rates start to slowly fall (down to the 7-8% increase level). It’s a little early to be crying wolf just yet, but I still maintain that this is as good as it’s going to get for insurers, and that their stock prices are overvalued. Of course, whatever you think about them you can’t sell Kaiser or Group Health short!

HEALTH PLANS: Is Kaiser thriving? Probably!

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For the last several weeks Kaiser Permanente has been running a series of TV and print commercials called “Thrive“. They ads contain a bunch of pap series of suggestions about living a healthier lifestyle and how Kaiser Permanente wants its members to “thrive”. This is apparently a $40m campaign, but given that Kaiser has been losing some market share and has been having trouble combating the high-deductible health plans on offer from its rivals like Wellpoint, Blue Shield, Healthnet et al, it doesn’t sound like an outrageous amount to spend. Of course, like every other health plan Kaiser is trying to get younger, healthier people to sign up as members. And while the commercials may not make much sense (be honest, which ones on TV do?), they are at least related to healthcare in some way, unlike an early 1990s campaign in which Roger Greaves, then Healthnet’s CEO, was shown kayaking next to a pod of killer whales.

Up to now I’ve ignored this as I think these type of ads are mostly irrelevant to the real health care market. But as with any big organization, Kaiser has its detractors, and there’s been some fuss about the campaign in the Oakland Tribune. One Kasier detractor has written to several health care bloggers suggesting that we cover it. Well, after confirming that my correspondent really is an ex-Kaiser employee, I’ve taken the bait, although I’m not sure my correspondent will be too happy with my conclusions. (Full disclosure–Kaiser was a client of organizations that I worked for back before 1999. I never worked for them on a dedicated project and have had no financial connection with them since).

Kaiser has made some basic if not serious missteps, and in the “Thrive” campaign it has left its detractors a few open goals. For a start, despite the name of the campaign, the URL KaiserThrive was not reserved and unfortunately for Kaiser was taken by a very upset Kaiser patient/member. And it gets a little worse, particularly as several of the internal powerpoints describing Kaiser’s communications issues were left openly available on the Internet. Now, having looked at what’s in one document I can’t find anything that reflects too badly on Kaiser. It’s mostly a series of suggestions as to how to position the corporate message and relate to members better. And those problems are basically the same ones Kaiser’s always had.

For as long as I can remember Kaiser has had a good reputation with a high percentage of its members, and a reputation amongst better-off socio-economic groups as a plan OK for working-class people but not for people like “you and me”. While the some of this attitude is down to class snobbery, part of it is due to the inherent structure of the Kaiser system which restricts its members to Permanente doctors and Kaiser facilities.

There are some genuine criticisms of the way Kaiser does business. Wellpoint’s Len Schaeffer has long criticized Kaiser’s commitment to charity care and providing care for Medicaid patients. This quote is from a 1995 interview:

Q: How does Kaiser Permanente fit into the changing market picture in California?
A: Kaiser Permanente has done a marvelous job for its membership, the bulk of which resides in California. But, as a nonprofit HMO, I don’t think it has done much for other Californians. Kaiser does not enroll those who cannot pay its premiums. In fact, I argue that Kaiser has taken all of the medical revenues of its California membership-almost, five million people-out of the state’s pool of available health care monies, put it in its own private health insurance system, and therefore made the rest of the system bear the burden of caring for all of the people who are uninsured.

However, despite criticism that it doesn’t do enough for non-members, Kaiser has been at the forefront of some genuinely innovative medical programs for those who are its members, even if it might be financially better off without them. It was one for the first to introduce a comprehensive HIV care program and introduced comprehensive disease management programs back in the 1990s, some way ahead of most of its competitors. That of course means that Kaiser’s sicker members tend to stay with it, which really is the opposite of what a health plan’s CFO might want, and what some of its more financially successful rivals have actually done.

And despite some criticism of the technology behind its HealthConnect program (for one dissenting view see here) and its tendency to inadvertently kill off smaller software vendors by bureaucratic mind-shifts, Kaiser is the private organization in America with the biggest initiative in health IT. The commitment to improving care by implementing electronic health records is genuine and huge, and at least by its own account (as reported in Health-IT World) is going quite well.

So overall I still believe that Kaiser is on the side of the Angels. There are though several issues that need to be cleaned up. One is the slightly obvious one of taking care that internal documents stay internal. While I haven’t read anything that showed malfeasance or bad intent in those documents that were left unprotected, that level of attention to detail doesn’t demonstrate too much security competence. As Kaiser is going to be creating probably the largest interconnected medical database in the private sector, they are going to have to make sure that that data is secure, and understood to be secure. Already some commentators are suggesting that outsourcing some of the technology to India will compromise data privacy. My correspondent has a weblog devoted to these and other issues. A quick perusal of that weblog shows an unhappy ex-employee, who is mostly upset at the internal office politics s/he experienced at Kaiser. But that doesn’t mean that all the comments can be dismissed out of hand, especially as some documents linked to on the web are clearly not meant for public viewing. Scratch this type of thing and it gets even weirder. There is one baffling web site which suggests that there’s a pattern of criminal and violent behavior apparently attributal to rogue employees within Kaiser, but I think this seems to be descending into conspiracy theory.

I suspect the truth is all much more mundane. Kaiser is a big bureacractic organization with all the turf battles and complications that you’d expect. Add to the mix the fact that Kaiser, for all the efforts of the corporate office, is still a collection of regional insurers and of regional medical groups that all have their own politics and agendas. Nonetheless, it has consistently scored well on NCQA and other quality measures, and has shown more innovation than most providers of its size and almost every health plan in terms of patient care, disease management programs and its IT initiatives.

Despite its well-publicized problems, particularly its big losses in 1997-8, Kaiser has been a massive net positive in the Western US health care system. Its success in the 1980s and 1990s certainly ushered in managed care–and there would be those that argue that wasn’t such a good thing–but you can’t blame Kaiser for what were almost all the failings of other managed care plans. You can credit Kaiser for delivering more cost-effective and higher quality care on a mass scale than almost anyone else in America, and for making the investments to ensure that they’ll be able to do that in the future.

Sure there’ll be problems as the new system is rolled out. Sure a new advertising campaign — while arguably needed to promote the organization’s viability — is no panacea and perhaps the money could be better spent elsewhere. But nothing I’ve seen from the detractors so far persuades me to believe that, silly ad campaign or not, Kaiser needs to do anything else than keep on its current course.

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