THCB

Categories

Above the Fold

TECHNOLOGY: EMR use up among family docs

• 1

A survey of family practice docs conducted by the AAFP estimates that some 20% are now using EMRs. Given that I know something about surveys of this topic, I remain a little dubious about the numbers until it’s much clearer how EMR was defined and who was surveyed, but the direction is at least clear. About 13% are using one already, 7% just starting up and another 50%-odd intending to start in the medium term.

Of course in many other countries the rate of GPs using the EMR is well over 80%, and in most industrialized ones it’s way higher than here. So we have plenty to aim at if we are to really have the best health information system supporting the "finest medical care" in the world.

POLICY/POLITICS: Blogging the convention

I have cable TV for the first time and I am typing away listening to the Democratic convention on CSPAN.  In general it’s pretty dull and barely anyone is mentioning the rather large Elephant in the room of the Bush presidency and Iraq.  As this is all about bringing over the wavering swing voters in swing states, the Democrats are learning from the Republicans that you need to "stay on message" .  (For more on that you should check out John Stewart here) One of the main messages is for "health care". Clinton even said one of his achievements was that his administration "produced more health care" but didn’t say what that meant.  Overall it’s unclear what that means and when you listen to veteran Ways and Means (now no longer Chmn ) John Dingell it get less clear.  He managed to say that "1 in 3 under 65 without health insurance at some point in the year" is not acceptable. He then went on to say that "health care costs more than steel in a car"  (which has been true for at least a decade) and that that too is unacceptable. Then he went on to say that health care cost 15% of GDP and that was unacceptable.  I hope the SEIU wasn’t listening!  here eventually  I assume)

Later it’s the Governor of Arizona (a woman no less–Janet Napolitano) also spent a long time on health care. She did have a quick bit about troops overseas, but then ragged briefly on the drug companies, but soon was back in the 1990s conversation about HMOs making medical decisions.  That’s an old and increasingly irrelevant argument, at least for us wonks (although apparently Michael Moore’s next movie is about HMOs). Meanwhile she’s complaining about the increasing cost of health care. Maybe if the Democrats repeat their fuzzy message enough times, they’ll seize this issue. My question is, why did they decide this is the big issue? And why are they talking about the cost of health insurance which is somewhat alien to most people and not just focusing on the cost of drugs?  I guess it just means that if they talk about it and the Republicans don’t, they own the issue.

(Transcripts will be

POLICY/HEALTH PLANS: CDHPs–Employers skeptical, actuaries doubtful.

• 1

I’ve taken my time in responding to guest poster Andy Ribner, MD whose piece published in THCB last week was aggressively in favor of one free market approach to health insurance (Medical Savings Accounts) and highly opposed to another (Managed Competition) while putting almost all the blame for the system’s current failures on the alleged oligopsony of the large insurers. Although the concentration of market share among the top 10 insurers continues to increase nationally, I’m pretty sure that Andy is wrong when he calls this an oligopsony.  In the last 5 or so years, insurers have moved away from their aggressive tactics versus providers (although in fairness Andy is right to point out that hospitals have legally and practically found it easier than physicians to fight back). Instead insurers have turned to one old trick, more accurate risk selection (as in Atena’s recovery), and are developing a new wrinkle on a second–new product creation.   The new product is the Consumer Directed Health Plan (CDHP), which is really another way of wrapping some extra services around a Health Reimbursement Account, or alternatively a Health Savings Account (HSA). There’s been lots of noise about these CDHPs and of course the HSA was opened to everyone in the Medicare Modernization Act (MMA).  The problem with the HSA that no one has successfully explained away to me is how does an employer/insurer go about putting much of the risk pool in the hands of the healthy 80% who aren’t going to use much of the money for care, without at the same time reducing the amount available to the 20% who are going to need it.  HSA advocates just go on about buying catastrophic insurance as though there’s a separate pot of money–but it’s all health care spending. This continues to baffle me.

And I don’t appear to be alone.  HSC is out with another of its prescient studies of 12 major metro areas, and this one looks at the attitudes of employers.  Here’s the quick news release while the actual details are in this issue brief. Essentially the study finds that employers are pretty skeptical of the whole HSA/CDHP movement for two major reasons.  The first is that they don’t see how their overall risk pools are going to save money by doling out actual cash to everyone–in particular they are concerned that giving healthy people $1000 will make them spend it on unnecessary stuff, (or presumably in the case of the HSA rather than the employer controlled HRA, keep it). via Don Mccanes’s PNHP quote of the day, comes word that the journal Health Services Research (Yes I’ve got a degree in that subject but barely ever read the mag anymore!) has an entire August issue on CDHPs. And in that issue are two studies from representatives of two of the guilty parties who’ve been pushing the hype.  One is a benefits consulting group while the other is a health plan. Arnie Milstein from Mercer shows that from their studies of their client base "While enrollment in consumer-directed health plans continues to grow steadily, it remains a tiny fraction of all employer-sponsored coverage".  Mercer seems to believe that tiered coverage (which is akin to the old managed care IPA model of creating exclusionary networks) is doing better.  But they are skeptical of the ability of consumers to choose between different services with the current lack of easily available information.

One key concern was that by providing a spending account to all employees, employer payments might increase for their healthy workers. One employer noted that 70 percent of the firm’s covered employees had health care costs of less than $1,000 a year. Concerned that a spending account would encourage healthy workers to use more services despite being able to rollover unused funds to the next year, this employer expected that a $1,000 spending account would raise costs, not lower them.

  Similarly the employers don’t seem to think that there are any real controls on how the money is spent on the 20% who blow through their deductibles–and of course that’s the group on whom 80% of the money is spent 

Another concern was that consumer-driven health plans had no better high-cost case management tools than other managed care options. Employers believed there were more opportunities for cost savings by managing high-cost cases rather than reducing utilization among the majority of workers who already use little care. In addition, many noted that spending accounts did not provide a "high-end user" with any incentives to control costs because individuals with catastrophic illnesses typically are fully covered by the health plan after the deductible and any out-of-pocket maximums are met.

Now this is not objective data, it’s a report back on the likelihood of the success of CDHP’s based on the reaction of employers who are opining from their very limited data and guess work.  But the news can’t be good for advocates of the "HSAing" of the system. And the conclusions of the HSC researchers are that CDHPs will struggle to get much traction.  Like many health care "innovations", the hype on the powerpoint exceeds the reality on the ground.

However, it’s worth really pushing this one a little further because

None of that is nearly as damning as a study from Humana of its own employees in a new CDHP it offers. They looked at the claims experience of those who chose to go into the CDHP versus those who didn’t. While demographically the two groups appeared to be the same, the "risk experience" (that’s care utilization in English) of the people who chose the CDHP, in the year prior to their switch, was around 60% of the other groups. In other words the healthier people went into the CDHP. The authors conclusions are that:

The offering of high-deductible or consumer-directed health plan options alongside more traditional options caused risk segmentation within an employer group….Further research is needed to determine whether risk segmentation will worsen in future years for this employer and if so, whether it will cause premiums for more traditional health plans to increase.

In other words the fears of the employers whom the HSC researchers met were justified. If you have a CDHP, too many of your healthy employees will leave the overall pool and take the money, while the sicker ones will stay in the traditional plan. And that means that overall the whole pool will cost more.

So it appears that my skepticism in the face of the HSA and the CDHP seemingly taking over the whole market looks to be correct. Perhaps Andy Ribner should get out the old articles about managed competition?

TECHNOLOGY: Quick clinics as part of the Walmartization of health care

• 3

For some time various people in health care have been talking about the Walmartization of health care. What they are talking about (and you know who you are Mr. Singerman!) is the development of a low cost generic health care service that could deliver primary and walk-up care very cheaply. Well as iHealthbeat reported the other day, it looks like these quick clinics are indeed turning up in large mall stores, but the first ones are appearing in a Target and Club Foods…..although if they’re a success you know the Beast of Bentonville won’t be far behind. What do these clinics do?

Diagnose and treat several common ailments, provide vaccinations and offer cholesterol and blood pressure screenings. Staffed by nurse practitioners, these "MinuteClinics" use clinical guidelines software to help diagnose and treat patients. The $15 million software incorporates established clinical guidelines and notes patients who come to the clinic frequently with the same complaints so they can be referred to a doctor, said Catherine Wisner, director of national operations for MinuteClinic.

There have also been reports of more and more actual surgery happening overseas, particularly in India and Thailand,and the Brits have been sending patients overseas to buy cheap surgery in France and Spain (at a cheaper marginal cost than building more facilities at home).  So are we at the start of a globalization of surgery, in which the easy stuff will be delivered by low-paid staff backed up by smart computers, and the expensive staff will be contracted out to cheap but well-trained foreigners?  Probably not a reality any time soon, but a trend worth watching.

HEALTH PLANS: Wellpoint stock plummet insanity shock horror probe!

So I assume John Garimendi went short on Wellpoint stock last week. The market marked Wellpoint down 7% on the opening on Monday following Friday’s hiccup in the merger process, but it ended down only 4%. I nearly bought some yesterday, but luckily I did not as today it’s down another 7% from roughly $115 last week to $98 now.  So it’s on its way down to the $85 a share it was at when the takeover/merger was announced in November last year.

All of this sounds a little like a typical Wall Street overreaction.  BC Life & Health only accounts for 10% of the California business of Wellpoint. Wellpoint’s 2003 10K (warning: huge file) showed that it had 15 million members nationwide with 6 million of those in California.  So, back of the envelope, if BC Life and Health is 10% of 40%, it’s only 4% of the business.  So it seems to me that they have their day in court and if they lose they prepare to very quickly spin it off, take it out of the merger and sell it.  Business Word) have for a while said that health plan stocks were overvalued–although no one’s been listening to us!  But it’s clear from the Anthem and Wellpoint management team that this merger is going ahead whatever it takes. If Wellpoint was worth $115 a share last week, it’s not worth only $98 with the cash from a sale of BC Life & Health rather than the small business it gets from it.  That doesn’t make logical sense, but then again when die Wall Street ever make logical sense?

I (along with Don Johnson at the

HEALTH PLANS/PHARMA: Politics is all there is….

Sometimes you can sleep safe at night thinking that your elected representatives are going to leave some things alone.  But in the last couple of days it’s become apparent that political motivations are the only motivations left for those in government.  was as good as his word .  Now that’s not as bad as it sounds for the merger as a few years ago California set up a Department of Managed Health Care to regulate HMOs (which for some arcane reason had not been under the insurance commissioner but under the department of Corporations). The Department of Managed Health Care is part of the executive under Arnie the Guvornator, who is of course a Republican and in the pocket of state business interests (or at the least has taken a bunch out of their pockets– but as he says they’re "powerful interests" not "special interests"). So Managed Health Care’s approval, which OKs the sale of Blue Cross’ main health insurance businesses was a shoe-in, after a modest bit of back and forth.  Garimendi only has authority over the smaller Life and Health business which writes short-term indemnity policies and a few life insurance policies.  It can be easily jettisoned, but not before Wall Street had a fit about the ruling and knocked Wellpoint down 7% Monday morning. Given that Garimendi said his decision was final, expect this division to carved out and sold to someone else–there’s too much at stake for the Wellpoint and Anthem leaders to allow this to derail the whole thing. the front page of the New York Times. The Administration argument that has been actively pursued since 2002 is that essentially the FDA makes the best decision possible, hence you shouldn’t be able to sue a manufacturer for a product defect.

The first example is the Wellpoint Anthem merger.  There was a lot of fuss in California about the egregious package given to top executives at Wellpoint, and Democrat john Garimendi the insurance commissioner basically said he would not approve the merger unless Wellpoint paid out over $600m into public programs. And on Friday he

But you could tell exactly what was going to happen by who had power over what, and by what their political affiliation was.  But if you didn’t think that that ruling should have been so politicized (after all this is post-conversion and as part of its original conversion Blue Cross handed mega-billions over to the state for a couple of huge Foundations), you probably wouldn’t have thought that even this Administration would change the better part of a century’s practice and intervene in product liabiliy suits on behalf of big pharma.  But there it is on

Allowing consumers to sue manufacturers would "undermine public health" and interfere with federal regulation of drugs and devices, by encouraging "lay judges and juries to second-guess" experts at the F.D.A., the government said in siding with the maker of a heart pump sued by the widow of a Pennsylvania man. Moreover, it said, if such lawsuits succeed, some good products may be removed from the market, depriving patients of beneficial treatments.

Quite how that reconciles with the ability of the FDA to admit it made a mistake or didn’t have enough information when it first made a decision, I do not know. (Remember Rezulin perhaps?).  But it’s only the Administration’s politics (and the interests of its funders which amount to the same thing) taken to the extreme. And of course it’s not as if we’ve set up a rational system of Socratic dialogue to replace the legal system, we’re just now using the might of the Federal government to attempt to remove access to it from people attacking its friends.   It does make at least TCHB somewhat nostalgic for the days when apparently some decisions in government were made for vaguely commonsense reasons.  But I suppose that era has passed.

W,F&A: Bizarre big fraud in southern California

Totally wacky frauds often pop up in health care, and unnecessary surgery at the recently sold Redding Medical Center was the downfall of Tenet. But I can’t remember a case of healthy people voluntarily undergoing surgery for a bribe, as happened in one facility in Southern California. The surgery clinic’s operators were charged today with bilking more than $97m from insurance companies. Apparently over 5,000 people from all over the country were recruited, took the bribes (which were only between $300 and $1,000), had some surgery and then their insurers were billed through a series of shell companies. Apparently the state laws that demand that claims are paid within 45 days meant that many insurers who didn’t have pre-authorization just paid up when they got the bill.

Funnily enough, I had surgery in early April (also in California) and my insurer which also didn’t require pre-authorization, demanded information from me and from several of my providers several times before it would process the claims. After getting the insurer everything it needed, (including a form it told me it needed but had not yet sent me or asked for!) it started processing the claims last week — that’s nearly 120 days later. Given this fraud, perhaps they had a point?

Hatip to California Healthline for this one.

TECHNOLOGY: The Ten Year Plan — American health care IT goes Stalinist

So following in the footsteps of like-minded Lenninists Stalin and Mao, HHS secretary Tommy Thompson announced a 10 year plan for health technology on Wednesday. Speaking as a Lenninist (or at least someone who agrees that it’s usually better fewer but better) I can now say that I approve of something the Adminstration has done. For the guts of David Brailer’s (the new Health IT Czar–not such a Lenninist title I guess!) speech come several new initiatives–detailed in this article. The associated report has serveral overall reccomendations:

The report identifies four major collaborative goals. With these goals are 12 strategies for advancing and focusing future efforts:

Goal 1: Inform Clinical Practice. This goal centers largely around efforts to bring EHRs directly into clinical practice. Three strategies for realizing this goal are: Strategy 1. Provide incentives for EHR adoption. The transition to safe, more consumer-friendly and regionally integrated care delivery will require shared investments in information tools and changes to current clinical practice. Strategy 2. Reduce risk of EHR investment. Clinicians who purchase EHRs and who attempt to change their clinical practices and office operations face a variety of risks that make this decision unduly challenging. Low-cost support systems that reduce risk, failure, and partial use of EHRs are needed. Strategy 3. Promote EHR diffusion in rural and underserved areas. Practices and hospitals in rural and other underserved areas lag in EHR adoption. Technology transfer and other support efforts are needed to ensure widespread adoption. Strategy 1. Regional collaborations. Local oversight of health information exchange that reflects the needs and goals of a population should be developed. Strategy 2. Develop a national health information network. A set of common intercommunication tools such as mobile authentication, Web services architecture, and security technologies are needed to support data movement that is inexpensive and secure. A national health information network that can provide low-cost and secure data movement is needed, along with a public-private oversight or management function to ensure adherence to public policy objectives. Strategy 3. Coordinate federal health information systems. There is a need for federal health information systems to be interoperable and to exchange data so that federal care delivery, reimbursement, and oversight are more efficient and cost-effective. Federal health information systems will be interoperable and consistent with the national health information network.

Goal 2: Interconnect Clinicians. Interconnecting clinicians will allow information to be portable and to move with consumers from one point of care to another. This will require an interoperable infrastructure to help clinicians get access to critical health care information when their clinical and/or treatment decisions are being made. Three strategies for realizing this goal are:

Goal 3: Personalize Care. Consumer-centric information helps individuals manage their own wellness and assists with their personal health care decisions. Three strategies for realizing this goal are: Strategy 1. Encourage use of Personal Health Records. Consumers are increasingly seeking information about their care as a means of getting better control over their health care experience, and PHRs that provide customized facts and guidance to them are needed. Strategy 2. Enhance informed consumer choice. Consumers should have the ability to select clinicians and institutions based on what they value and the information to guide their choice, including the quality of care providers deliver. Strategy 3. Promote use of telehealth systems. The use of telehealth — remote communication technologies — can provide access to health services for consumers and clinicians in rural and underserved areas.

Goal 4: Improve Population Health. Population health improvement envisions improved capacity for public health monitoring, quality of care measurement and bringing research advances more quickly into medical practice. Three strategies for realizing this goal are: Strategy 1. Unify public health surveillance architectures. An interoperable public health surveillance system is needed that will allow exchange of information, consistent with privacy laws, to better protect against disease. Strategy 2. Streamline quality and health status monitoring. Many different state and local organizations collect subsets of data for specific purposes and use it in different ways. A streamlined quality-monitoring infrastructure that will allow a complete look at quality and other issues in real-time and at the point of care is needed. Strategy 3. Accelerate research and dissemination of evidence. Information tools are needed that can accelerate scientific discoveries and their translation into clinically useful products, applications, and knowledge.

While we can all agree that these are laudable goals, which should have been pushed by the government long ago, the obvious reaction is along the lines of "Show me the money!" In iHealthBeat’s excellent roundup George Isham, chief medical officer for Minnesota-based HealthPartners said the 10-year plan is "awfully ambitious" and will "take a lot of money and a lot of time," but is "needed. I hate to mention it here but the equivalent of what the Brits will spend on their 10 year Health IT plan in US dollars per population is about $100 billion and they are starting from 80% use of ambulatory EMRs by their GPs! And of course if you adjust that spending per capita spending on health care, you’d need to spend more like $250 billion or $25 billion a year. (Brief Editorial: My proposal is that we stop blowing the $25 billion a year we waste on the Drug War and spend it on this instead!)

Now that’s not exactly a fair comparison as American private sector spending on IT is going to be the driving force here, but there is still a need for government funding and pump priming. So what was the atmosphere in DC Wednesday, and are we likely to get that pump priming? For that here’s some comments from the ever wonderful Jane Sarasohn Kahn:

Carolyn Clancy’s (head of AHQR) assertion that, "The framework ROCKS!" was indicative of the level of excitement and passion around Dr. Brailer’s report that, in the words of Secretary Thompson, "launches the decade of health IT."  Dr. Brailer introduced the day by invoking the image of Neil Armstrong walking on the moon (as I was thinking good karma all the while for the other Armstrong of the day, Lance).  The day was full of gravitas lent by Senator Frist and Rep. Nancy Johnson, and Patrick Kennedy had a front-row seat waiting to introduce his legislation for comprehensive electronic health system in ten years’ time.  The morning had the key Federal health care leadership all committing to the plan, from the VA and DoD (both far ahead of the private sector, which you can do with scale and one large purchaser) to AHRQ, the FDA, and the eloquent Elias Zerhouni of NIH.    The afternoon was quite interesting: on the private sector vendor panel, Neal Patterson (Cerner) spoke about railroads and the Federal input on "gauge."  But it was Dan Garrett of CSC who made Mr. Patterson’s blood pressure boil as Garrett waxed lyrically about open standards, with our old friend Neil deCrescenzo of IBM echoing the same.  In fact, open standards are crucial to Dr. Brailer’s vision of interoperability and could be the friction point for moving forward.  But Tommy Thompson wants to take no prisoners in this effort and is very aggressive on the topic of the health IT decade.  Even Mark McClellan of CMS is pushing forward with a Medicare Internet portal in Indiana later this year to roll out nationally after they learn what they need to learn.  And he’s also pushing eRx sooner rather than the MMA mandate suggests.

So keep your eyes on this. After 40 years of activity towards electronic health records the Feds have finally called for the building of a Railroad, and the train may begin to leave the station sooner rather than later….

PBMs: Something old and something new

You may not know this (I admit I didn’t) but there’s a trade association for PBMs called the Pharmaceutical Care Management Association which yesterday was one of the first to come out and laud the Administration’s call for improving the Nation’s Health Care Information Infrastructure. That reminded me of something old and something much more recent about PBMs. I’ve written pretty widely about PBMs in THCB, with the much shorter version being that despite the fact that they have totally failed in their stated mission to keep the lid on drug prices, and for that matter haven’t really done much to advance care management (or "health improvement"), they have made a business out of being decent claims processors and by inserting themselves firmly in the financial dealings between their clients and their "partners" in the pharma world. filed Monday against Caremark:

  No wonder that the biggest PBM, Medco, is starting its first ever PR campaign. There’s no question in my mind that PBMs need to find what we consultants call a new value proposition–but then I’ve been thinking that for a while. What that new value prop is and whether they can get away with doing what they’ve been doing for a while longer while they figure it out is of course up in the air.

It’s interesting that the PBMs are now loudly backing the new health IT initiative (more on that from THCB tomorrow when I hear back from my spies in DC) as the data processing part of their business was indeed launched by the last major change to Medicare. That was the ill-fated Medicare Catastrophic Act which was passed in 1988 and repealed in 1989. One thing that its passage caused was the installation of what ended up being NDC and PCS’ pharma claims and editing transaction systems. So now when you go to the drug store, your claims and co-pay information is right there for the pharmacy tech to read off to you–no, you didn’t notice that happening in the doctor’s office! So it looks like PBMs have decided that the new Medicare "Modernization" Act with its somehow associated IT initiative will do something equally good for its business in the future.

They’d better hope so. Whatever the future holds, their present continues to come under increasing attack. THCB has mentioned before the attempt by large employers to go around the PBMs in negotiating rebates, and several of the bigger PBMs have been settling with trial lawyers and their customers over the extremely opaque nature of their rebate mechanisms. I thought that the plaintiff’s attorney put it rather well in a further lawsuit

The lawsuit says that Caremark keeps discounts from drug makers and pharmacies instead of sharing them with members of the Morrell benefit plan. It says Caremark secretly negotiates rebates for drugs and keeps that money. It also says that the company provides plan members with expensive drugs, instead of cheaper alternatives, to get rebates.

assetto corsa mods