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What Experts in Law and Medicine Have to Say About the Cost of Drugs

Pharmaceutical drug costs impinge heavily on consumers’ consciousness, often on a monthly basis, and have become such a stress on the public that they came up repeatedly among both major parties during the U.S. presidential campaign–and remain a bipartisan rallying cry. A good deal of the recent conference named Health Law Year in P/Review, at the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School, covered issues with a bearing on drug costs. It’s interesting to take the academic expertise from that conference–and combine it with a bit of common sense–to see which narratives about drug costs hold up.

The Industry Narrative

In defending the ever-growing cost of drugs, the pharmaceutical industry can’t roll out a single, intuitive explanation. Rather, their justification breaks down into many independent but interacting parts. We have to tease these apart before examining their validity.

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Headlines We Won’t See In 2017

Earlier, I offered a sarcastic headline view of the coming year.  Yet, underlying these headlines are some more serious issues that we as an industry have to address.  They may not happen this year, but we need to continue to make progress.  Wouldn’t it be awesome if for once we under predicted what will happen?

Healthcare Organization Wakes Up In Strange Place, Reports Massive Headache

Reality:  Many organizations are not quite sure what hit them – they have purchased and implemented a number of systems, sometime more than once, in the last several years and now are waking up to the reality that that might not be enough or even the right set of technologies for the emerging payment models.  Return on investment is hard to show, debt used to finance purchases along with stimulus funds are coming due.  System after system has had to report negative results on financial reports due to higher than expected costs, longer than anticipated implementations.  It’s enough to give any CIO a headache.

Healthcare Interoperability Finally A Reality

Reality:  Interoperability remains elusive despite ongoing talk and the creation of various coalitions.  Sometimes it seems that few want to actually solve the problem.  Healthcare organizations are afraid to lose patients to competitors.  Vendors are fighting for the last remaining market share, and aggressively seeking to displace others, and using local market coverage as a selling point.    Sure there are lots of sites now propped up showing FHIR APIs – but in reality these are mostly read-only and not particularly functional.

Foolproof Security Strategy Unveiled:  Don’t Click on $h!t

Reality:  We expect to continue to see rise in reported security incidents.  Attackers are not script-kiddies, but sophisticated hacking businesses making hundreds of millions a year in paid ransoms.  Our industry has a large surface area – with lots of organizations and millions of employees on millions of computing devices.  Our treatment facilities are filled with millions of connected devices monitoring at the bedside.  Like in any public health crisis, we need to not just wait around for the all-powerful anti-biotic.  We need to do basic hygiene well – patching, training, monitoring and rapidly responding to small outbreaks before they become bigger.  We are an industry that has experience in facing one set of viruses – we need to turn that thinking on securing our systems and keeping them healthy.

Affordable Care Act Files for Divorce, Claims Infidelity

Reality:  It is uncertain what the final fate of the Affordable Care Act will be.  Chances are that some changes will be made – too much public bluster was made about repeal for there to be any backing down, but the potential real harm that may come to the electorate that loses coverage or sees prices resume their rapid rise, will prove to be a check on full-scale repeal.

Family Physician Found Dead in Pool of Alphabet Soup

Reality:  It is challenging to remain in a small practice today.  There is an ever changing set of requirements and initiative from payers and from government entities and it can all sound like a pool of random letters.  For example, MACRA is now in effect and yet surveys show that many providers have no idea what it means or what is involved.  Radiology providers will soon have to ensure that ordering doctors begin using clinical decision support management (CDSM) tools to subject orders to appropriate use criteria (AUC) that were developed by Provider Led Entities (PLEs).  This is on top of HIPAA, HITECH, OPPS, and many others.

Consumer-Driven Healthcare Recalled, Engagement Engine Too Weak

Reality:  For all the talk about consumer driven healthcare, there seems to be little change in the position patients find themselves.  There remains little pricing information, payment terms and coverages are difficult to understand for the average reader, and Health Savings Accounts aren’t much other than a new form of deductible for insurance companies.  Most consumer online tools provide little utility, other than provider-out reporting.  Patients continue to have difficulty getting access to medical records in any useable form.  Mobile applications seldom exist, and when they do few if any are on par with the experiences of other tools like Uber, Amazon, Snapchat or Facebook.  It’s bad enough if you are reasonably healthy; it’s worse if you are trying to manage a chronic illness.  You can completely organize a complex trip on a phone, but just try to pay a healthcare claim, set up a number of visits to a variety of providers, or understand what you need to do next to care for yourself.

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What Is This Strange & Confusing Healthcare Language We Have Invented?

Public understanding about how our health system operates is woefully low: surveys show only one in five adults has functional knowledge about how to choose a physician, hospital or insurance plan, or compare treatment options. The lexicon we use in our industry lends to this confusion: powerful words and phrases that convey something different depending on the user’s intent.

As we debate the replacement for the Affordable Care Act, it might be worthwhile to ask lawmakers to clarify what they mean when they use them and examine our own uses in tandem:

Quality: In U.S. healthcare, quality is not defined by a consistent set of metrics that address diagnostic accuracy and clinical outcomes.  Physicians associate it with access to a clinician; insurers associate it with necessary care; employers with provider network scale and premium costs and the public thinks it’s about scheduling and parking, not results. There are a dozen websites where information about the quality of care in hospitals and medical practices is available, but each has its own methodology and results vary widely. As a result, every hospital and every physician affirms they deliver “high quality care” and every insurer tells its enrollees, groups and regulators its plans are “high quality”. Little wonder quality is confusing.

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WaPo Leaked Tape of GOP Repeal & Replace Talks is Troubling. But Also Weirdly Reassuring …

“We’re telling those people that we’re not going to pull the rug out from under them, and if we do this too fast, we are in fact going to pull the rug out from under them.” 

– Rep. Tom MacArthur (R-N.J)

“The fact is, we cannot repeal Obamacare through reconciliation.  We need to understand exactly: what does that reconciliation market look like.  And I haven’t heard the answer yet.” 

– Rep. Tom McClintock (R-Calif)

“It sounds like we are going to be raising taxes on the middle class in order to pay for these new tax credits.” 

– Sen. Bill Cassidy (R-La) 

These quotes, and many others, from a leaked recording of the Republican closed-door strategy session in Philadelphia last week are both jarring and reassuring.   

They reveal in harsh light what the media, pundits, and commentators have been saying for weeks: the Trump administration and congressional Republicans are in a deep quandary about the best path forward on repeal and replace, and are just beginning to weigh the pros and cons of the complex policy options involved. 

But the discussion also shows us that rank and file Republican lawmakers understand the difficulty of the task and know the political price they’ll pay if they screw it up.  Their remarks also imply frustration with the cavalier, ill-informed, and mixed-message statements coming out of the White House.

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Data For Improving Healthcare vs Data For Exasperating Healthcare Workers

The phrase “healthcare data” either strikes fear and loathing, or provides understanding and resolve in the minds of administration, clinicians, and nurses everywhere. Which emotion it brings out depends on how the data will be used. Data employed as a weapon for purposes of accountability generates fear. Data used as a teaching instrument for learning inspires trust and confidence.

Not all data for accountability is bad. Data used for prescriptive analytics within a security framework, for example, is necessary to reduce or eliminate fraud and abuse. And data for improvement isn’t without its own faults, such as the tendency to perfect it to the point of inefficiency. But the general culture of collecting data to hold people accountable is counterproductive, while collecting data for learning leads to continuous improvement.

This isn’t a matter of eliminating what some may consider to be bad metrics. It’s a matter of shifting the focus away from using metrics for accountability and toward using them for learning so your hospital can start to collect data for improving healthcare.Continue reading…

Simulated ACOs vs Real-World ACOs

CMS began two Medicare ACO experiments in 2012 – the Pioneer program and the Medicare Shared Savings Program (MSSP). Data on these programs available at CMS’s website paints a discouraging picture of the programs’ ability to cut costs. But two papers published in the last two years in the Journal of the American Medical Association paint a much rosier picture. A paper written by David Nyweide et al. claimed to find the Pioneer ACO program generated gross savings two times more in 2012, and slightly more in 2013, than CMS reported. Similarly, a paper  by J. Michael McWilliams claimed to find the MSSP program saved money in 2014 while CMS’s data says it lost money.

What explains the discrepancy? Answer: The JAMA papers examined simulated ACO programs, not the actual Pioneer and MSSP programs. Moreover, Nyweide et al. neglected to report that shared savings payments would have greatly reduced the gross savings, and both Nyweide et al. and McWilliams ignored the start-up and maintenance costs the ACOs incurred. (JAMA’s editors redeemed themselves somewhat by publishing a comment  by former CMS administrator Mark McClellan which warned readers that Nyweide et al. failed to measure the “shared savings payments to the ACOs” and “the investments of time and money” made by the ACOs.)

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Should Doctors Think?

It has been suggested that to improve quality in healthcare we must reduce variability in how diseases are diagnosed and treated.

It has been inferred that clinical outcomes would improve exponentially if doctors would only follow established guidelines instead of their own whims.

I take that to mean if doctors didn’t think for themselves so much, the health of our nation would be better. I take that to mean that we may be overqualified for the simple work of delivering “evidence based care”.

That is the fantasy of the non-clinician creators of our new medical world order.

Doctors spend all these years learning biology, biochemistry and physics. We learn about anatomy, physiology and pathology. Eventually we study diseases. Then we learn how to practice what we were taught. Finally, more than a decade after we started, do we earn the right to practice independently, only to become the obedient instruments of a healthcare system that demands conformity and disciplines those who put their training to use by questioning politically motivated health policies and overly simplistic clinical guidelines.  

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Headlines We Expect To See In 2017

Every year, around this time, we are inundated with healthcare industry predictions. Most of these seem to be more retrospective than forward thinking – taking what seem to be fairly obvious trends and simply saying “Finally, this year will be the year that [fill in the blank] happens!”  Well, here are my predicted headlines for 2017.

  • Healthcare Organization Wakes Up In Strange Place, Reports Massive Headache

A Healthcare Organization reportedly just woke up this morning in a stranger’s apartment, with a massive hangover. Note on pillow says, “Thanks for a great night, big spender. I haven’t had so much fun in a long time. Had to go run a few API errands, but feel free to stay as long as you’d like. Oh, it looked like you may have overdone it – aspirin in the bathroom. Love, EMR xxoo. ”

  • Healthcare Interoperability Finally A Reality

Today Epic announced that it had finally penetrated 100 percent of the healthcare market and therefore interoperability was no longer an issue. The final CIO holdout was quoted saying, “We decided that we could no longer resist the movement. We give up.”

  • Foolproof Security Strategy Unveiled: Don’t Click on $h!t

After years of investment and study, one Chief Information Security Officer seems to have found the cure to all information security problems plaguing hospitals. “After careful observation, we noticed a common pattern among our users: they click on links sent to them in email. Once we told them to stop clicking on them. As a result, we noticed our ransomware problem begin to clear up. Sure, our employees don’t get to find out if they’ve won a vacation package, or if they can help out a Nigerian princess, but we are safer.”

  • Affordable Care Act Files for Divorce, Claims Infidelity

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Digital Health, Health Reform & the Underserved – Where Will 2017 Lead?

by LYGEIA RICCIARDI

In these first days of the Trump Administration, there is a great deal of uncertainty, but it’s clear that healthcare will remain in the spotlight. Repealing and replacing “Obamacare” is still at the top of the Republican party’s—and President Trump’s—agenda.

Congress and Trump have already taken steps to repeal the Affordable Care Act (ACA), though a replacement for it has yet to be articulated. Trump promises “insurance for everybody” in a form that is “much less expensive and much better,” but has yet to reveal details about how to meet his goals.

While changes in healthcare policy will have ramifications for all Americans, members of underserved populations are likely to be disproportionately impacted because they are statistically less healthy  and are also the least likely to have health insurance coverage. Parts of the ACA address Medicaid, which provides health insurance to 70 million people—by definition among the poorest Americans. Nine million whites make up the largest racial group of people who have gained coverage as a direct result of the ACA, but significant numbers of minorities, including 3 million African Americans and 4 million Hispanics, have also gained coverage. The ACA also helps LGBT Americans by forbidding discrimination due to gender or sexual orientation, and by enabling same-sex families to apply for joint healthcare coverage. According to a report issued by the nonpartisan Congressional Budget Office on January 17th, if the ACA were to be rolled back without a replacement, 18 million people would lose health insurance in the first year. There would also be significant restrictions in reproductive health services for women.

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And the Democrats Wonder Why They Lost the Election?

Now I have insurance. But I can’t use it. What am I supposed to do? I know this one is long but it’s worth a read if you want to understand issues pertinent to the Affordable Care Act. My personal story illustrates many of the problems with the ACA.

I started taking notes on the Health and Human Services Secretary hearing, and I will share more as I scrutinize the hearing in more detail but let’s start with the breakdowns below and my experience with Obamacare.  Here goes:

These are the breakdowns of who gets what coverage in the United States:

Medicare 18% – 52m

Employer 61% – 178m

Medicaid 22% – 62m

Individual 6% – 18m (exchanges cover 4% of the 6%–these are the people who have been forced onto the Obamacare plans)

Note: this writer is in the BOTTOM of the barrel here (Individual). Most of the individuals in the “Individual” category are either the upper contingent of the working poor, those who work for small businesses like restaurants or family owned grocery stores and the like that don’t provide health insurance benefits (more and more common these days), and/or sole proprietors like myself. Many health care providers are self employed hence we have been forced into the Obamacare exchanges if we are not high earners. High earners won’t buy on the marketplace and will purchase individual plans outside of the marketplace.

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