The Health Care Blog – Page 316 – Everything you always wanted to know about the Health Care system. But were afraid to ask.

Above the Fold

Evidence-Based Diagnosis and Faith-Based Solutions

Apr 11, 2017• 6

By KIP SULLIVAN, JD

It’s official: the Medicare Payment Advisory Commission (MedPAC) has at long last decided that MACRA’s MIPS (Merit-based Incentive Payment System) can’t work.
MedPAC reached this decision at its January 12 and March 2, 2017 meetings.

Its principle rationale was that measuring “merit” (quality and cost) at the individual physician level, which is what MIPS requires CMS to do, is not possible. As one MedPAC staff person put it at the January meeting, “A redesign of the MIPS program should build off a clear-eyed assessment of the limit of the national Medicare program’s ability to assess clinician performance” (pp. 235-236 of the transcript of the morning session of the January 12, 2017 meeting).

“Value-Pricing” of Drugs and Pharmaceutical Innovation

Apr 10, 2017• 26

By UWE REINHARDT

In a fascinating paper on drug pricing, Ana D. Vega and her five co-authors trace increases in the price of brand-name and generic drugs in the U.S. during the period 2012-15, using the national average drug acquisition costs (NADAC) data made public by the Centers for Medicare and Medicaid Services (CMS). These acquisition costs are the prices that retail community pharmacies pay to acquire medicines, usually from a wholesaler.

The tables in the paper show that the top 50 increases in the price of generic drugs over the three-year period ranged from a “low” of 448% to a high of 18,808%. For branded drugs the increases over the period ranged from a “low” of 63% to a high of 391%.

The paper also presents data on the wholesale acquisition costs (WAC) differences between first-in-class drugs and subsequent me-too-drugs, the latter usually costing much more than the first-in-class drugs, although they typically involve only small molecular changes. Here the price differentials varied from a low of -2.3% (the sole case me-too-drug actually being cheaper than the first-in-class drug) to a high of 61,259%.

It is rare to find such transparency on drug prices in this country, presumably because the data are in possession of a public agency, the CMS. By contrast, the private sector usually confronts both patients and researchers with contemptuous opacity. The pharmaceutical benefit management industry (PBMs) is particularly opaque on drug pricing, and private insurers and employers have gone along with it.

Price increases of the sort reported by Vera et al. usually are defended on two distinct grounds.

The first is what has come to be called “value pricing’ the idea that the price of a drug should be pegged on the value that drug has to patients or to society at large, in their eyes. For life-saving drugs or pain-killing drugs, that value can be very high.
Another defense of the ever rising prices of drugs is that they are needed to provide the incentives for new drug development.

Value Pricing

In my presentations on drug pricing, I often use the following metaphor to convey the central point of this concept.
Picture, then, a man somewhere in the Sahara desert close to dying of thirst.

Along comes a camel caravan for tourists, loaded with bottles of water. Assume the chap on the first camel is a private equity manager who knows a thing or two about “value creation” through “value pricing.” Assume the lady on the camel behind the first is a corporate lawyer.

Jumping off the camel, the private-equity chap approaches the dying man and, water bottle in hand, queries the dying man thus:

“How much would you pay me for this fresh bottle of water?”

When the Patient is a Racist

Apr 8, 2017• 10

By JULIE KIM, MD

Something has changed.

In my first 16 years in practice, I received exactly one insensitive comment from a young child who had never seen an Asian in person. But in the last year, I have received a hateful, bigoted comment approximately every other month. (That includes the remarks by a person who tried to reassure me that the comments were not directed to me personally, but to the “other illegals.”)

My colleagues are experiencing an increase in bigoted comments too. A fellow physician, a southeast Asian man, says he has been called “Dr. Bin Laden” on several occasions recently.

Last September, one of my students was on the receiving end. A patient’s father requested another doctor when he saw the medical student assigned to his son’s case was black. My student and I went to see the patient’s family together. I acknowledged the father’s anxiety and reassured him that we could treat his son. I asked the surgeon-on-call to see the patient.

Is Healthcare a Right? A Privilege? Something Entirely Different?

Apr 8, 2017• 24

By BRIAN JOONDEPH, MD

Election Day 2016 should have been Christmas morning for Republicans. Long awaited control of the White House and both houses of Congress. A chance to deliver on an every two-year election cycle promise to repeal and replace Obamacare. In 2010 Republicans needed the House. They got it. In 2014, it was the Senate. Delivered. But we still need the White House they said. Asked and answered with President Donald Trump.

So, what happened a few weeks ago when the House bill fizzled like a North Korean missile launch? Disparate factions within the House couldn’t unify behind Speaker Paul Ryan’s plan, despite pressure from the White House. For some it wasn’t a repeal, only a rearranging of the deck chairs on the sinking Obamacare ship. Others in the GOP were happy with the status quo, preferring to rail against Obamacare in campaign speeches rather delivering on empty campaign promises. Still others, #NeverTrumpers, knowing that President Trump was behind the House bill, preferred to see the bill, and Trump, fail.

Kudos to the Democrats. When they ran the show in 2008, they herded their cats and passed Obamacare. No Statist Caucus on one side or a Tuesday (or Thursday or Friday) group on the other side, each wanting their own version of healthcare reform.

You’ve Got Facility Fees!

Apr 7, 2017• 12

By NIRAN AL-AGBA, MD

In a beautiful community on the Olympic peninsula, just north of where I live and practice, it happened again; another private clinic sold to a large medical corporation.

Peninsula Children’s Clinic was a bustling pediatric office meeting the vital complex healthcare needs of children in Port Angeles, WA for the commercially insured as well as Medicaid patients. Why were they forced to close?

A phone call with their office manager six months ago foreshadowed the outcome, “we are losing a great deal of revenue seeing Medicaid patients making it difficult to survive.

Peninsula Children’s Clinic was unable to remain financially solvent, so they were purchased, like a horse on the auction block, by the Olympic Medical Center. Their website recently posted the following:

“Peninsula Children’s Clinic is now licensed as part of Olympic Medical Center. Patients seeking care at these hospital-based clinics may receive a separate billing for a facility-fee. This fee could result in higher out-of-pocket expenses for patients.
Patients should contact their insurance company to determine their coverage for hospital-based clinic facility charges.”

Hospital-based clinics tack on “facility fee” charges, which are separate from the bill for the doctors’ services, for the use of the room in which the patient was seen. One hospital administrator told me to think of it as “room rental.”

Facility fees bring in a considerable flow of cash and have the secondary benefit of incentivizing hospitals to buy independent practices because then the hospital can charge two to five times more. Buying independent practices, like Peninsula Children’s Clinic, expands the hospitals’ market share and allows greater leverage when negotiating reimbursements.

Hobson’s Wrong Answer

Apr 6, 2017• 15

By JIM PURCELL

Thomas Hobson was his name, a licensed carrier of passengers, letters, and parcels between Cambridge and London in the years surrounding 1600. He kept horses for such purpose, and rented them when he wasn’t using them. Naturally, the students all wanted the best horses, and as a result, Mr. Hobson’s better mounts became badly overworked. To remedy this situation, he began a strict rotation system, giving each customer the choice of taking the horse nearest the stable door or none at all. This rule became known as Hobson’s Choice, and soon people were using that term to mean “no choice at all” in all kinds of situations.

Not to be confused with Sophie’s Choice, the title of a 1979 novel by William Styron, about a Polish woman in a Nazi concentration camp who was forced to decide which of her two children would live and which would die. That phrase has become shorthand for a terrible choice between two difficult options.

Both Choices come to mind when reading this week’s Boston Globe article titled Hope for Devastating Child Disease Comes at a Cost: $750,000 a Year. The headline, as is too often the case, is inaccurate. It’s $750,000 for the first year, and $375,000 annually after that. But let us not quibble. That equals a lot of resource.

Pulse Check: Value-based Care Models and the New Administration

Apr 5, 2017• 1

By GREG FULTON

From within the new leadership at Health & Human Services (HHS), some anticipated and current payment models tied to MACRA are advancing, while others not-yet-tied to MACRA are being delayed.

MSSP Track 1+ was officially unveiled post-election through a CMS webinar March 22, and CPC+ has moved to round two. Also, but prior to the presidential election, CMS put forth several new bundled payment models whose start dates have been delayed.

Track 1+

The CMS ACO Track 1+ is being designated as an advanced-alternative payment model (A-APM) for MACRA, meaning qualified participants would be eligible for the up-front five percent MACRA bonus, and would be exempt from MIPS scoring.

Track 1 will remain with its MIPS APM designation.

The difference is Track 1+ comes with downside risk, though less than that of Track 2 or Track 3 models, themselves also A-APMs.

Do Asians Have Harder Heads? On Sports Concussions and the Need For a Fairer, Medical Research Funding Policy

Apr 4, 2017• 4

By CHUNG, ZINK, BARR

At a January event on “The Future of Baseball” organized by the Sports and Society Program at NYU’s School of Professional Studies, Yankees executive Jean Afterman spoke to the superiority of baseball over football by noting that “at least our athletes don’t have to worry about their heads after they’re done.” It was an innocuous statement but one that points to a growing assumption that sports concussion is both (a) prevalent and (b) a debilitating disease to be feared.

But is it true that sports concussions are the public health scourge of our time? Media coverage would make it seem so, with countless stories dedicated to professional athletes suffering through pain and dementia, youthful athletes retiring for fear of brain injury, and billion dollar lawsuits against the NFL.

Key Mechanisms That Define Health City Cayman Islands’ Value Innovation

Apr 4, 2017• 17

By VIDAR JORGENSEN and BRIAN KLEPPER

Health City Cayman Islands (HCCI), less than three years old and located in the Caribbean just an hour’s flight south from Miami, is a 104-bed hospital outpost of Bangalore, India-headquartered Narayana Health (NH). HCCI has caught the attention of US health care professionals not just as a nearshore health care destination, but for having extremely high quality despite pricing that is a fraction of that in the US, as well as careful attention to the patient’s experience. HCCI is not only a competitor to traditional US health systems, it is potentially a radical disruptor. It’s model is so different that it could significantly change the standards by which health systems are judged.

HCCI’s performance is the culmination of a deep commitment to access, efficiency and excellence. NH’s Founder, Dr. Devi Shetty, began with a mission-driven awareness that health care is an essential need and must be affordable to be accessible. He then spearheaded an enterprise-wide focus on process optimization to deliver the best care possible at the lowest possible price. The results have been remarkable. Fifteen years ago, NH’s bundled costs for open heart surgery in India averaged about $2,000. Now they are about $1,400, or about 1% of average US cost. Interestingly, Dr. Shetty believes that better results are within reach and has set a five year target of $800 for those services.

The Secret Sauce of Successful Pilots

Apr 4, 2017

By CHELSEA POLANIECKI PARTNER CONTENT

Ever wish you could tell the future? Well, you can’t- but a pilot study can certainly help. Pilots are instrumental in helping organizations learn how a technology application might work in practice, or, more specifically, in their practice. By conducting a pilot, you get a chance to test out your technology, predict what might occur when you expand your reach, and most importantly, learn how to tweak your business model to support a large system. Eric Conner, Co-founder & Chief Revenue Officer of Healthify learned that, “Piloting de-risks trying out new technology… and forces both the host and the innovator to be more innovative.” Conner also adds that after piloting, “… you’re ready to implement your technology in a large health system [since] you have the kinks all worked out” and your company is prepared with the tools they need for large-scale growth.