The Health Care Blog – Page 284 – Everything you always wanted to know about the Health Care system. But were afraid to ask.

Above the Fold

Global Risk Report: Davos, Trump and Climate Change

Feb 6, 2018

By DAVID INTROCASO

During the recent World Economic Forum in Davos, Switzerland, President Trump once again noted his objection to the Paris climate accord. In an interview with Piers Morgan, Trump again called it a “horrible deal” because, as has been widely reported, climate change or global warming is, per the president, a “hoax” perpetrated by the Chinese. “There is cooling and there’s a heating – I mean look,” Trump explained to Morgan, “it use to not be climate change. It used to be global warming. That wasn’t working too well because it was getting too cold all over the place. The ice caps were going to melt. They were going to be gone by now, but now they’re setting records, okay?”

Trump was asked about climate change because the topic was on the Forum’s agenda. Not surprisingly, in the days leading up to the confab, climate scientists once again found the proceeding calendar year one of the warmest on record. NASA ranked 2017 the second warmest since 1880 (or since reliable record keeping began), or after 2016. NOAA, using a slightly different methodology, ranked it the third warmest after 2016 and 2015 respectively. Not only were the last three years the warmest on record, the five warmest years on record have occurred since 2010, 17 of the 18 warmest since 2001 and last year marked the 21^st consecutive year the contiguous United States had above average temperatures. Record 2017 temperatures were somewhat unanticipated however because of the lack of an El Niño (or Pacific trade wind), effect that is associated with increased global temperatures. Because air temperatures are largely determined by ocean temperatures, also not surprisingly the five warmest ocean temperature years recorder have been 2017, 2015, 2016, 2014 and 2013 respectively. Ocean temperatures in 2017 were exceptionally warm. Measured as heat energy in Joules, 2017 ocean temperatures exceeded 2015 by 1.51 x 10^22 Joules, or the amount of electrical energy China produces annually.

Will Amazon Eat the Market?

Feb 5, 2018• 5

By PAUL KECKLEY

Last Tuesday, a trio of corporate heavy weights announced they were joining forces to fix the U.S. healthcare system. The CEOs of the three—Jeff Bezos of Amazon, Warren Buffet of Berkshire Hathaway, and Jamie Dimon of JP Morgan, vowed to create “an independent company that is free from profit-making incentives and constraints..to provide simplified, high-quality and transparent healthcare at a reasonable cost.”

Details about the proposed venture are limited but it nonetheless sent shock waves across the industry. Stocks for industry mainstays like United Health, CVS, Express Scripts, Mylan and others plummeted. And, on the heals of mega-deals like CVS’ $69 billion acquisition of Aetna two months ago, speculators theorized it might be Armageddon for healthcare as we have known it in the U.S.

First, what we know for sure:

The new venture will focus on the collective buying power as employers of healthcare for the 1.15 million employees in their organizations. Their approach features five strategies widely. widely used by large self-insured employers to contain their employee health costs. This one is expected to leverage technology in a unique way:

Primary care gatekeepers: Large employers vest considerable responsibility in primary care services that appropriate preventive health, manage chronic populations and control referrals to specialists and hospitals. Promotion of healthiness and wellbeing, the integration of physical and behavioral health and alternatives therapies that reduce dependence on unnecessary access prescription drugs are mainstays of the primary care gatekeeping model.
Narrow networks: The networks of hospitals, allied health professionals, hospitals and others will be tight. Those providing high quality, low cost services will be contracted, and employees will be empowered with data to monitor their performance.
Supply chain management: Every line item fixed and direct cost will be lean. Prescription drug use, for instance, will be accessed through a restrictive formulary, and so on. Amazon is known to be hyper-efficient in its operating budget: employees are expected to fly economy class and office opulence is a no no.
Employee choice & risk sharing: A key to the venture’s uniqueness will be the tools and responsibility given employees to select plan options that align with their needs and preferences. High deductible plans will be options, but technologies that equip them to make informed choices of doctors, treatments, hospitals, drugs and others will be a central feature.
Technology: Technologies that allow employees to own their medical records, interact with Alexa for information and counsel, integrate smart devices and engage with their providers are the backbone of the venture. Knowing treatment options, their costs and where the highest and best value is accessible in the employee’s provider network is central to the venture’s success.

None of these five is new, but together, they’re powerful IF implemented aggressively and at scale.

Let’s face it. Healthcare’s ripe for disruption: we cost too much, hide prices that bear faint resemblance to their underlying costs, avoid accountability for outcomes, complain we’re underpaid and over-regulated, protect our silo’s so each gets a piece of the pie, mark everything up and pass-it-through and declare we’re the best system in the world.

It’s (Still) the Prices, Stupid

Feb 5, 2018• 2

By SETH HARDY

Inefficient markets create price differentials for identical goods. These price differentials frequently occur among markets dominated by oligopolies. Taking advantage of market pricing inefficiencies is known as arbitrage. Commodity traders frequently arbitrage by buying low and selling high. In inefficient markets for perishable goods, such as airline tickets, hotel rooms, or medical imaging, there is no opportunity to re-sell these goods. Thus consumers of these goods, such as health insurance companies, will attempt to buy at the lowest possible price to maximize value. Today we see many apps and websites, such as Expedia, that engage in improving these markets in airline and hotel industries. Stroll Health is one company attempting to scale this behavior to medicine.

Our current Hospital Outpatient Department (HOPD) payment schedule is one example of an inefficient market where identical CPT codes are priced very differently based on whether they are provided in a grandfathered hospital outpatient department or a freestanding outpatient medical center. Hospital accountants will justify this higher payment schedule by attributing social expenses such as police and training programs. Other HOPD supporters will claim they deliver relative value through higher quality (outcomes) that justifies (often disproportionally) higher prices. Yet increasingly “illusions about value: that we know what it means and can measure it, that the same things matter to all patients” are being voiced.

Medicine Is a Profession That is Rapidly Losing Control of Its Tools.

Feb 5, 2018• 5

By ADRIAN GROPPER, MD

Artificial Intelligence hype and reality are everywhere. However, the last month or two has seen some thoughtful reflection. HHS / ONC announced “Hype to Reality: How Artificial Intelligence (AI) Can Transform Health and Healthcare” referencing a major JASON report “Artificial Intelligence for Health and Health Care [PDF -817 KB],”. From a legal and ethical perspective, we have a new multinational program: “PMAIL will provide a comparative analysis of the law and ethics of black-box personalized medicine,…”. Another Harvard affiliate writes “Optimization over Explanation” subtitled “Maximizing the benefits of machine learning without sacrificing its intelligence”. Meanwhile, an investigative journalism report from the UK “Google DeepMind and healthcare in an age of algorithms”, “…draws a number of lessons on the transfer of population-derived datasets to large private prospectors, identifying critical questions for policy-makers, industry and individuals as healthcare moves into an algorithmic age.”

What sets these major papers apart from the constant AI and Big Data science or hype is that they are not particularly technical. Although long, they are accessible to pretty much anyone including physicians and patients. What shocks me, as a career medical technology engineer also trained as a physician, is how passive physicians and patients seem as medicine shifts from open public science to secret corporate black boxes.

A Whiff of Market-Based Health Care Change

Feb 1, 2018• 15

By BRIAN KLEPPER

Tuesday’s announcement about Amazon, Berkshire Hathaway and JPMorgan (A/BH/JPM) was short on details. The three mega-firms will form an independent company that develops solutions, first, for their own companies’ health plans and then, almost certainly, for the larger health care marketplace. But the news reverberated throughout the health care industry as thoroughly as any in recent memory.

Health care organizations were shaken. Bloomberg Markets reported that:

Pharmacy-benefit manager Express Scripts Holding Co. fell as much as 11 percent, the most intraday since April, at the open of U.S. trading Tuesday, while rival CVS Health Corp. dropped as much as 6.4 percent. Health insurers also fell, with Anthem Inc. losing as much as 6.5 percent and Aetna, which is being bought by CVS, sliding as much as 4.3 percent.

As expected, these firms’ stock prices rebounded the next day. But you could interpret the drops as reflections of the perceived fragility of health care companies’ dominance, and traders’ confidence in the potential power of Amazon’s newly announced entity. Legacy health care firms, with their well-earned reputations for relentlessly opaque arrangements and egregious pricing, are vulnerable, especially to proven disruptors who believe that taming health care’s excesses is achievable. Meanwhile, many Americans have come to believe in Amazon’s ability to deliver.

What Kmart’s Settlement Says About Health Care Fraud

Feb 1, 2018• 9

By CHARLES SILVER and DAVID A. HYMAN

Perhaps because its size was so small—“only” $59 million—the press paid little attention to Kmart’s recent settlement of False Claims Act (FCA) litigation in which it was accused of overcharging Medicare, Medicaid, Tricare, and private insurers for generic drugs.

But it is worth discussing both the conduct that got Kmart in trouble and the way that conduct came to light. The former shows how dysfunctional the market for pharmaceuticals is and the latter nicely demonstrates the severe limits on the government’s ability to police fraud and abuse.

The nub of Kmart’s scheme was that it sold generic drugs to cash-paying customers at very low prices while charging governmental payers vastly more. For example, Kmart sold a 30-day supply of a generic version of a prescription drug for $5 to cash customers, but then billed Medicare $152 for that same drug. Because pharmacies can only bill the government for their “usual and customary charges,” Kmart was pocketing millions of dollars that it was not entitled to.

When it announced the settlement, the DOJ said, as it always does, that “[t]he government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud.” In truth, both the success of Kmart’s scheme and the settlement show exactly the opposite: The government can neither prevent nor police even the most obvious forms of health care fraud. We make this point at length in our forthcoming book, Overcharged: Why Americans Pay Too Much For Health Care.

Consider a few facts. While public payers were happily paying Kmart’s inflated bills, they were also receiving bills from Walmart that accurately stated the far lower market price for the very same drugs. When James Garbe, the pharmacist who discovered what Kmart was doing, had a prescription for 90 days of blood pressure medication (Lisinopril/HCTZ) filled at Walmart, it billed the government $2—the difference between his copay ($10) and Walmart’s cash price ($12). When he had the exact same prescription filled at Kmart, it billed the government $50.84, even though the charge should only have been $5 because Kmart’s cash price was $15. No one in the government (or at the private carrier that administered the part D program for Medicare) wondered why Kmart’s charge was 25 times as much as Walmart’s, even though the two stores compete directly with one another.

Ambergan = Amazon + Berkshire Hathaway + JPMorgan

Jan 31, 2018• 15

By MARGALIT GUR-ARIE

Dear primary care doctor, Jeff Bezos is about to devour your lunch.

All of it. And then he’ll eat the table, the plates, the napkins and the utensils too, so you’ll never have lunch ever again. Oh yeah, and they’ll also finally disrupt and fix health care once and for all, because enough is enough already. Mr. Bezos, it seems, got together with two of his innovator buddies, Warren Buffet from Berkshire Hathaway and Jamie Dimon from J.P. Morgan, and they are fixing up to serve us some freshly yummy and healthy concoction.

Let’s call it Ambergan for now.

This is big. This is huge. It comes from outside the sclerotic “industry”.

And it’s all about technology. The founders are no doubt well versed in the latest disruption theories and Ambergan will be a classic Christensen stealth destroyer of existing markets. When the greatest investor that ever-lived combines forces with the greatest banker in recent memory and the premier markets slayer of all times, who happens to be the richest man on earth, all to bring good things to life (sorry GE), nothing but goodness will certainly ensue.

What Is a “Co-Presidency”? Would It Work? Biden-Obama 2020

Jan 31, 2018• 8

By DANIEL STONE, MD

Why would the last certifiably sane occupant of the White House consider a run for the Vice-Presidency, an office that Vice-President John Nance Garner derided as “not worth a pitcher of warm spit” and John Adams scorned as “the most insignificant office that the invention of man contrived or his imagination conceived?” In a word, Trump. The former President told voters in 2016 that his legacy and life’s work would be threatened by a Trump presidency. That would be doubly true of a second Trump term.

Federal law poses no obstacle to the Democrats’ dream ticket. The 22nd amendment, ratified in the wake of FDR’s four electoral victories, prohibits the election of a president to more than two terms. No provision prevents a former president from assuming the office through succession nor from running for the vice-presidency. Securing Obama’s assent for the race would likely require Biden to offer him a virtual “co-presidency.” The notion has been raised before. In 1980, Ronald Reagan, also facing a challenging run against an incumbent president, briefly considered former President Gerald Ford for his running mate and “co-president.” Ultimately, Reagan lacked sufficient comfort with his former opponent to test such uncharted political waters.

To Err is Homicide in Britain – The Case of Dr. Hadiza Bawa-Garba

Jan 30, 2018• 12

By SAURABH JHA, MD

The good that doctors do is oft interred by a single error. The case of Dr. Hadiza Bawa-Garba, a trainee pediatrician in the NHS, convicted for homicide for the death of a child from sepsis, and hounded by the General Medical Council, is every junior doctor’s primal fear.

An atypical Friday

Though far from usual, Friday February 18^th, 2011 was not a typically unusual day in a British hospital. Dr. Bawa-Garba had just returned from a thirteen-month maternity break. She was the on-call pediatric registrar – the second in command for the care of sick children at Leicester Royal Infirmary. As a “registrar” she was both a master and an apprentice – a juxtaposition of roles necessary for the survival of acute care in the NHS. Because there aren’t enough commanders, or consultants (attendings), in the NHS trainees must fill their shoes or else the NHS will collapse.

The captain of the ship and Dr. Bawa-Garba’s supervisor, Dr. O’ Riordan, was not in the hospital but teaching in a nearby city. As horrendous as “attending not being in the hospital” sounds this, too, is not atypical in the NHS. Dr. Bawa-Garba’s colleagues, i.e. other registrars, were also away, on educational leave. Normally, a registrar each is assigned to cover the wards, the emergency department and the Children’s Assessment Unit (CAU). On that day, Dr. Bawa-Garba covered all three. She was new to the hospital, but with no formal induction – i.e. no explanation where things are and how stuff gets done in the hospital – she was expected to get along with the call and find her way around the hospital.

As anyone who has been a junior doctor in NHS can attest – the normal, the optimal, is unusual, and what is usual in British hospitals is remitting and relapsing chronic understaffing. The abnormal eventually becomes normal. You work through the anarchy. The anarchy is both the old normal and the new normal.

Bigger is Not Always Better: How Consolidation in Health Care Hurts Patients

Jan 30, 2018• 2

By TIMOTHY HOFF

The recent news that U.S. retail giant CVS Health will purchase insurance giant Aetna, in part to gain millions of new customers for its prescription drug and primary care businesses, is another ominous sign for patients. Patients should worry about all the continued consolidation in the health care industry, whether it is Walgreens buying Rite-Aid to increase their pharmacy clout; Anthem’s ill-fated attempt to purchase Cigna to become an insurance monopoly; or hospital systems like Partners Healthcare in Boston trying to buy the hospitals and physician networks in and around its service area to control patient flow and increase market share. Consolidation often limits competition, and when that happens in market-based systems especially the result, says good research, is often that the cost of health care goes up. This does not benefit patients, who increasingly are paying more out of pocket for their insurance and for the services they receive from doctors, hospitals, labs, and drug companies.

The Affordable Care Act did little to encourage greater competition in the health care marketplace. That was probably by design, since those creating the legislation held an implicit assumption that the bigger players in each of the different industry areas like insurance, pharmacy, and hospital care could deliver given the size of the insurance expansion the ACA would promote. As we see from the existing premium inflation on the exchanges across the country and with prescription drugs, and the continued long delays in people’s ability to access care, this assumption was not accurate. To the contrary, the ACA’s focus on new and unproven structures like accountable care organizations; new payment models that reward scale and resource investment in things like information technology; and rewarding those organizations that have the most comprehensive performance measurement infrastructures has encouraged the kind of profit-oriented consolidation in the industry that does less to improve the overall system. Also, given the increased squeeze by payers like Medicare on payments to hospitals, for example, mergers and acquisitions are a natural yet dysfunctional corporate response to higher levels of uncertainty in the external health care environment.