Healthleaders has an interview with Robert Wachter in which he stresses the need for procedural, technology and cultural changes to end systemic medical errors. Go read. great stuff. And not a mention of Michael Millenson in a post about patient safety.
Above the Fold
HOSPITALS/PROVIDERS: GPOs under investigation
There’s a long article in the NY Times this weekend suggesting that the next target for investigation by HHS and DOJ are the GPOs (Group Purchasing Organizations). The largest of these Novation (the GPO of the VHA a group of some 1400 hpsitals and the much smaller University Hospital Consortium) has received a supoena investigating its relationship with suppliers. The NY Times mole, a former Novation exec, likened the case to the “best price” issues that Medicaid and Medicare have had with the pharma companies:
The former Novation executive said he believed that the federal investigators might see similarities in those arrangements to payments that drug companies have made to doctors who prescribed their brands – payments that have led to multibillion-dollar settlements by some pharmaceutical companies.
“Pharmaceuticals are referred to in the press because the average reader can associate with them more,” the former executive said. “Consumers don’t buy operating-room tables or X-ray machines, or that kind of stuff, but you’ve got the same sort of thing going on. And it’s huge, huge money.”
GPOs have historically had some influence moving market share between different suppliers, but any member of the buying group has always been free to go around the group if they can get a better deal outside it. So because the GPO cannot force its members into buying supplies through it, they are always looking to deliver reasons to stay within the buying fold. The article suggests that the complexity of the GPO’s arrangements both in terms of rebates for volume purchases it gets from manufacturers, and dollars and services it delivers back to its memeber hospitals has ended up with either over complex or false real pricing. Hence Medicare and Medicaid may not have got the best prices, as they are legally supposed to.
It might also be worth keeping an eye on whether the same issues have been raised in some of the bigger chains practices, notably HCA or Broadlane (the buying group owned by Kaiser and Tenet). There’s no hint of that in the report, but if HHS is looking at one GPO you can assume that most of them have been following the same pattern.
Where this investigation goes will be interesting. The complexities of rebates and pricing in these cooperatives are mind-boggling. Some of the intricacies of the relationships between the big hospitals, the GPOs, the big wholesalers (like McKesson and Cardinal) are very complex. Add into that mix that some suppliers, notably GE as reported in the NY Times a while back, are rolling in consulting across a whole hospital’s operations as part of a wider business realtionship, and it becomes very difficualy indeed to figure out what the “best price” really is.
POLICY: Watching the politics of MMA
The devil is in the details and all politics are local. Cliches, but in the implementation of health care policy and payment in the US, true cliches. Two articles over the weekend bear this out. The AP reports that insurers and pharma companies are fighting over the details of whether therapeutic categories are broadly defined in the details of the the MMA’s new Part D drug benefit (as the insurers want) or more narrowly (as the pharmas want). What’s at stake here is the ability of the insurer or PBM to switch a patient from an expensive branded product to a generic or a cheaper older brand. If they are in the same category, it’ll probably be OK, but if it’s in a different category, it probably won’t be. So should Cox-2 inhibitors be in the same category as ibuprofen? In fact a trial underway is looking at that precise question, and if there’s no real difference perhaps Vioxx and Celebrex will only be available under some kind of step therapy within Medicare Part D. Well you see where this is going.
For those of you really interested, here’s the first draft of the US pharmacopoeia guidelines, which includes a series of steps for meetings and comments. Those of us who prefer to gloss over the details and look at the big picture just need to realize that over the next decade lots of lobbying dollars will be spent to change tiny line items in the resulting final document.
And talking of tiny details in new regulations it appears that the Bush administration is running into trouble by trying to create regional Medicare managed care plans when the nation’s health plans (especially the Blues of course) are actually 51 different plans, all operating under different local statutes, and are not too keen to develop the alliances or infrastructure required to compete regionally when they’re mostly happy with their monopolies infrastructure at home. Now if you want competition, you have to make the market big enough so that you can have a few plans with some scale compete in a region. But of course it makes no sense for any plan to go into, say, a North Dakota and take on the local Blues plan with its 80% market share. How this gets squared away I don’t know, but I suspect that you’ll see an exemption for the share of the population living outside the top 100 metro areas, which after all are the real units that matter in the business of America (think TV markets!).
Frankly the state-based health insurance system is an anachronism. But then the state-based system of electing Senators (and Presidents!) is an anachronism too. (Note that a senator from California represents 15 million people where one from Alaska represents 200,000, but as far as the law’s concerned their votes are equal). It might actually be easier and faster for HHS to abolish the states and come up with 10 regions! On second thoughts, maybe not. But what a great idea.
HOSPITALS/PROVIDERS: Hospitalists save money
Over the last 10 years, the hospitalist movement has been growing from a small base in the US. In fact most countries have had hospitalists for decades and use their community-based GPs to refer patients to their hospital-based specialists. In the US where community-based physicians have held sway politically over hospital-based ones, the movement to get those community-based doctors to hand over their patients to the hospital has been proceeding slowly.
This has all been bound up in one of the basic anomalies of American health care. The physician gets paid some modified form of fee-for-service, so the more they do the more they get. However, since the early 1980s, the hospital gets a lump sum per admission (DRG-based), so its best interest is to kick the patient out as soon as possible. This inherent contradiction has been part of the reason that hospitals and doctors have had a slow-burn conflict over the years.
The hospitalist may be the solution. The hospitalist works for the hospital. While they usually bill insurers and Medicare less than their total salary costs, hospitals like employing the hospitalists because overall they save them much more by discharging patients earlier with no increase in readmissions. The results proving this are starting to come in. A new study in The American Journal of Managed Care compared an academic medical center in Iowa which had hospitalists managing patients alongside community and academic physicians. The patients treated by the hospitalists had similar (in fact slightly better) outcomes, but much shorter LOS and much lower costs.
Some community physicians also like the hospitalists, as they find they can make more money staying in their offices than they can bill by going to the hospital, and they don’t have to bother with the travel. But overall in health care old habits die hard, so expect this trend to continue to gain traction only slowly.
QUALITY: Pain, its treatment and hope amongst the insanity
I won’t rant on about it, but the DOJ headed by theocratic fascist John Ashcroft has declared war on pain doctors. For much more take a look at the Pain Relief Network’s site. And the arrest, imprisonment and career destruction being meted out not just to “outlaw” doctors but those in the forefront of science on pain relief has a visceral effect on how pain is treated for patients across the board. For a gut-churning example of how much pain rational intelligent clinically-educated patients are forced to endure by the system, see this article on the treatment of “My Left Lung” by nurse and patient Richard Ferri.
But slowly the tide may be turning. In an article titled Must We Die In Pain? the radical commies at Forbes note that little progress has been made yet.
In 1995, a group of researchers funded by the Robert Wood Johnson Foundation published a shocking result in the Journal of the American Medical Association. At some of the nation’s top medical centers more than half of cancer patients passed away in serious, uncontrolled pain. But guidelines from the World Health Organization indicate that 85% to 90% of cancer patients could have their pain controlled by oral medications. It seemed like a solvable problem. The Wood Johnson Foundation and the Soros Foundation were among the groups that worked on trying to improve the care of the dying. (The Soros Foundation’s Project on Death in America spent $45 million on improving end-of-life care.) What do we have to show for it? Patients still die in pain. A recent study by Joan Teno at Brown University found that of patients in nursing homes with excruciating pain, 42% were still suffering after a second assessment.
But,(as certain politicians might say), hope is on the way. First, there is greater awareness among clinicians of this issue than there was some years ago, and the realization that pain patients are almost always not the same as recreational opiod addicts. In fact a relatively dispassionate reading of the data suggests that almost all deaths from Oxycontin abuse come in conjunction with other forms of substance abuse and have nothing to do with pain management patients. Second, there is better awareness among physicians of alternatives, especially for the dying:
Doctors don’t always know about alternatives to narcotics. Raymond Gaeta, director of the Stanford Pain Management Service points out that a whole host of treatments exist. One option is anti-epilepsy drugs such as Neurontin from Pfizer (Note: which as described elsewhere in TCHB is dramatically growing in use) and Topamax from Johnson & Johnson, which can ease the pain of nerves damaged by chemotherapy. When these medicines don’t work, there are local anesthetics, and drugs delivered directly into the spine by pumps such as those made by Medtronic. These pumps are expensive–costing some $10,000 per patient–but Gaeta thinks they’re worth it, even for patients who only have a month to live. Doctors also can simply surgically destroy nerves, preventing the patient from feeling any pain.
Third, much of the fuss about pain and the DEA and DOJ’s draconian assaults on pain doctors have to do with Oxycontin, and the ability of addicts to somehow break down its slow release mechanism to use it for a heroin-like high. At least one company, Pain Therapeutics, has two drugs in clinical trials designed to deliver Oxycontin-like pain relief without either the high or the addictive side effects. One is designed to reduce the addictive qualities of the opiate, and the other is designed to prevent abusers from breaking down the slow release mechanism. (Disclosure: I own stock in Pain Therapeutics. Do your own DD but obviously I think it’s a winner) Whether or not these drugs work, there is clearly a market for making a safe and effective, non-addictive pain killer, that will hopefully send Ashcroft’s goons into retirement–although hopefully he’ll beat them to it in January.
Finally the DEA and several consultants from academic medicine came up with some pain medication guidelines, that hopefully will make physicians more confident in their ability to use opiates without feat of arrest and professional suicide. Let’s hope that the “enforcement” side of the agency is kept on a shorter leash now that the “drug” side has created these guidelines.
TECHNOLOGY: Stent sales go begging for J&J and Boston Scientific, with UPDATE
J&J’s Cordis unit has been having production problems with its Cypher stent. Boston Scientific has been having such bad quality problems that it recalled almost all its stents last month. Apparently the surgeons (oops! Alwin points out that I mean) interventional cardiologists and radiologists who want to use these drug-eluting stents cannot get hold of them for love nor money.
When I was a lad standing on the terraces at Chelsea (note to my American readers: that’s a soccer team), we used to say about one of our more inept forwards–after he missed yet another open goal–that he couldn’t score in a brothel with a roll of hundreds. If I was running BSC or Cordis right now I’d feel like that striker’s coach!
UPDATE: Friday’s Boston Globe has an article suggesting that Boston Scientific’s Taxus recall is even bigger than first thought. So this problem is actually getting worse before it gets better.
POLICY: Apparently health care costs real money (and yes, more on CDHPs)
The NY Times has an article on the shocking fact that increasing health care costs actually cost actual money. Apparently it costs businesses so much in additional health care costs to hire new (especially older) workers that they are hiring fewer than they would if health care costs were lower. And of course instead they’re hiring contract workers and sending jobs overseas.
Well it’s good to find out that the laws of economics are reported in the paper, so they must be true. In this case they are. Real wages in this country have barely budged upwards in the past 30 years. So what has gone up and been responsible for our increase in “wealth” over that time?
a) Working hours. Not only has the work year increased by about 10% over that time, but more importantly millions of women have entered the labor force and most families now need two incomes to keep going.
b) Productivity and technology: Which now means that you can buy a throwaway digital cameraphone that somehow you managed to get by without in 1973. It also means that a whole stack of stuff costs less (consumer goods) meaning that overall those real wages buy slightly more than they did, even though some things like education, housing and healthcare cost more.
c) Profits. Corporate profits have gone up faster than wages (especially in the last few years). The Marxists amongst us would note that this means that the share going to capital is rising faster than the share going to labor, particularly as stock ownership is still dramatically concentrated in the upper income groups.
d) Health care costs. Years ago I had a chart showing that the level of real wages was flat over 20 years while the increase in the healthcare cost part of total compensation went up over 200%. For a brief while in the mid-late 1990s the health care part of that equation settled down and real wages even went up a little. But now we are back in the old pattern. I don’t have the chart anymore, but if someone clamors hard enough I’ll figure out the numbers. Suffice it for now to say that health care costs are really eating into total compensation, and as HSC showed the other day, this is leading directly to fewer people getting health benefits at work.
So what to do about it? Kerry seems to care about the fact that health care costs are now getting through to consumers. Given that he barely mentioned this issue in years in the Senate, and now as the NYTimes says he’s raising it on every porch in middle America, methinks that his pollsters have told him that swing voters are feeling the pain. Bush doesn’t care and has no answers other than laughably and disingneuously saying that malpractice reform will solve the health care cost explosion, and promoting HSAs. Kerry’s solution is to basically make the government the insurer of last resort for catastrophic cases and force a pay-or-play solution on employers. Even if he wins (which I think now looks likely) and the Democrats retake the Senate (unlikely) the plan has little more than zero chance of becoming law this time around. It will however linger for the next time we have this serious national debate, which in my guess will be in the 2008-2012 time period.
Meanwhile, Karen Davis, radical commie and President of the Commonwealth Fund has made available the entire issue of Health Services Research that focused on CDHPs. THCB readers may remember that it had some surprising articles in it, not the least of which was health plan Humana’s research on its own internal CDHP which showed that it cost the employer (itself!) more than keeping its members in its standard plan. Davis has an excellent discussion of the research behind what the Canadians call user-fees (long version – short version) in which she points out that the RAND experiment back 25 years ago showed that increasing the actual cost of going to the doctor at point of service reduced services delivered to those patients. Of course you can read that two ways depending on whether or not you believe people use too few medical services or too many. But the key point that Davis makes is that the best way to improve quality (i.e. get the correct amount of services to patients) is to increase incentives to providers to do the right thing. She’s arguing for pay-for-performance, better use of IT, public reporting of cost and quality data, national EBM standards and a whole lot more spent on researching these issues at AHQR. And of course while she’s preaching to the choir as far as I’m concerned, it’s interesting to note that a version of these things appears in the Kerry plan too.
PHARMA: A great look at how a prescription drug gets marketed
Of all media sources you don’t usually expect in depth, balanced features from USA Today. But Tuesday’s USA Today has an excellent article by Julie Schmit on how Warner-Lambert (and now Pfizer’s) Neurontin went from being a minor epilepsy drug to a major CNS blockbuster. In 2004, the last year before it goes off patent, Neurontin will do over $3bn. Not Lipitor, but a pretty respectable number.
The answer is that Warner-Lambert promoted the off-label use of Neurontin from 1994, when it was introduced, to 2002, when it was given an additional approval for pain from shingles. The story:
Warner-Lambert’s offense was marketing Neurontin to doctors for purposes other than as a supplemental anti-seizure medication for epileptics. That was the only use approved by the Food and Drug Administration during Neurontin’s early years, when prosecutors say Warner-Lambert’s illegal marketing took place.
The Justice Department says that’s what Warner-Lambert did from shortly after introducing Neurontin in 1994 until 2000. Prosecutors alleged that Warner-Lambert lied to doctors about the drug’s effectiveness, paid doctors to allow a sales representative to sit in on sessions with patients and paid doctors, some up to $250,000, to unethically talk up Neurontin to other doctors. In fact, the list of ailments that Warner-Lambert claimed Neurontin alleviated was so long — covering pain, headaches, bipolar disorder, attention-deficit disorder, alcohol detoxification — that some Warner-Lambert employees dubbed it the “snake oil” list, government documents say.
The strategy worked. In 2002, 94% of Neurontin’s sales were for off-label uses, up from 40% in 1995, the government estimates, citing company documents and independent market research. Wall Street firm Lehman Bros. estimates that 90% of Neurontin sales are currently off-label
So Pfizer, having got Neurontin as a side dish to what it really wanted (Lipitor) when it bought Warner-Lambert, inherited the good and the bad with it. By 2002 the horse had left the barn and Neurontin was being prescribed for virtually anything that doctors and patients felt it might work for. Now that’s not necessarily a bad thing, and its very common. As PhRMA likes to point out, the FDA tends to be over cautious, but the same drug works differently for different people, and if a drug is doing some people some good who’s to blame them for using it and doctors for prescribing it. As one quoted patient says: “If it doesn’t work, then why do I feel better?”.
But that’s exactly the same argument made for medical marijuana. And while DOJ is massively over-zealous in enforcing its perception of the law in that case (at great cost to patients and society), fining Pfizer $430m for violating marketing practices over 8 years (although the admission is only up to 1996 not 2002) on a drug which is probably dropping more than $2 billion to the bottom line this year is not exactly vigorous retribution. But that is the typical state of play. It’s how the pharma business has worked for a long time and it’s unlikely to change any time soon, even if the DOJ chief’s name in February 2005 is Spitzer.
PHARMA: Is this the best they’ve got?
So after Marcia Angell rips the pharma industry a new one in the LA Times last week, the official comeback from Alan Homer, President of PhRMA is nothing short of pathetic. Is this really all that big pharma feels it needs to respond to? Go after her credibility (as Atlas did in THCB last week). Go after her facts, if you can. Or do something positive. Try to explain how drugs have reduced other health care costs over the years, and how they’ve improved life expectancy and that we have to pay for that. But apparently the only thing that Holmer can come up with is that his mom had fewer side-effects on a me-too? That absolutely justifies the sixth statin on the market to rise in price by 15% each year.
I don’t know if they can’t do any better or if they just don’t care what people think of them. Maybe the tobacco companies’ place at the bottom of the reputation list isn’t safe after all.
TECHNOLOGY: Forrester ‘s “Healthcare Unbound” gets some backing from NEHI
Brad Holmes at Forrester Research has a brief out looking at what they are calling Healthcare Unbound. Don’t get too worked up about the title–it’s the same thing as mobile eHealth (I think!). They think that this could be a $34 billion market in 10 years time. You can tell that Forrester’s a newcomer in forecasting. They break the number 1 rule by putting a number and a date in the same sentence, and $34 billion is a very precise number!
However, the concept that as Brad says “Some of the IT essential to the success of technology in, on, and around the body that frees care from formal institutions is now ready for prime time” is probably correct. Health Hero’s Health Buddy has been around for about 7-8 years now, but is still making steady progress. Meanwhile, my old boss Wendy Everett’s shop, the New England Health Initiative, is out with a study showing that remote heart monitoring is cost-effective and saving lives today. Here’s the key part of the summary:
Remote physiological monitoring (RPM) consists of an electronic device in the patient’s home that collects data on the patient’s condition, technology that enables transmission and analysis of those data, and most importantly a care delivery service that uses those data to communicate with and monitor the patient. It is the coordination of these three elements — the device, technology and care delivery service — that is essential to this innovative tool for disease management. Patients typically use electronic home monitoring devices once a day to collect basic physiological data and to answer specific questions about their condition. The patients’ data are electronically transmitted to a central monitoring station where the data are analyzed by nurses and care managers. These care managers can track early warning signs and symptoms and contact patients, providing feedback, education and medication changes long before they need to be hospitalized.
Reduced Hospitalizations and Costs
NEHI’s analysis found that using RPM for heart failure reduces rehospitalization rates by 32 percent, compared to standard outpatient care for the six-months following a heart failure hospitalization. Applying this reduction to a population of 100 Class III, or advanced heart failure, patients results in an average of 24 fewer hospitalizations, each of which costs, on average $9,700 and involves 5.5 days in the hospital. That results in a total reduction of 132 patient days per 100 patients. In addition, RPM can produce net cost savings of 25 percent when compared to standard care. On a per patient basis, this cost reduction amounts to net savings of $1,861 per patient, or in our 100-patient group, a total of $186,165. RPM use also has demonstrated a statistically significant improvement in heart failure patients’ quality of life as measured in Quality Adjusted Life Years (QALYs), as well as high levels of patient satisfaction.
As with all these technologies, if they build it, they will come (so long as Medicare pays for it–which is where the NEHI’s paper comes in methinks). Whether CMS wants to have another $34 billion line item on its hands is another matter.
