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Could Social Impact Bonds Help Restore Public Budgets?

Government budgets are tight during the recession, with cuts to public health budgets being announced on almost daily basis. What strategies are available to enhance revenues for public welfare programs–for the kinds of health and education expenses that won’t “pay for themselves”(at least in the short term), and therefore are often the first to get slashed in hard times? Raising tax rates among the wealthy, and introducing new taxes like a Robin Hood Tax, have been widely discussed. But some researchers have also studied entirely new revenue-generating strategies for social welfare programs that don’t rely on taxes—including a popular pay-for-performance scheme based on “social impact bonds” (SIBs).

How they work

A SIB is one of many “payment by results” plans. Just like other types of bonds (for instance, the municipal bonds we invest in to fund a local community college), SIBs involve private investors paying for a particular program that funds some social welfare operation. But SIBs are organized such that if the social welfare program is successful, there should be some net savings to the government and benefits to society.

For example, if a public health program prevents diabetes by successfully sustaining a weight loss intervention, the government should save money that would have otherwise been spent through Medicaid or Medicare on future hospitalizations caused by diabetes. As part of a SIB, the government agrees to pay a portion of these savings back to the investors who funded the weight loss program. And just like any investment, if the program fails, the investors lose money—theoretically attracting investors towards the most effective social welfare programs.Continue reading…

Is My Cancer in the Wrong Body Part?

Recently, our city hosted the fifth annual national marathon to fight breast cancer. This is not part of the Komen “race for the cure” but rather a grassroots effort that mushroomed from its inception five years ago into the impressive event it is today. Thousands of people participate as runners, volunteers, and cheerleaders clad in the signature color. I must admit, seeing some grown men run twenty six miles wearing pink tu-tus is both awe inspiring and a testament to dedication over self-image.

Its supporters include corporate sponsors, vendors, and exhibitors, and (no surprise) pharmaceutical companies. Its originators are a local TV celebrity breast cancer survivor and a cancer physician at Mayo clinic. It promises to donate 100% of the money to breast cancer research or care. To date, the event has raised millions of dollars and has met its contribution promise. It’s all very worthy, noble and heartwarming.

So why do I get an embarrassingly annoyed feeling when the pink parade makes its way through my neighborhood? After all, isn’t it a victory that so many people today recognize the need for education and awareness about a terrible disease that kills 40,000 women a year? Of course it is. And I have met many women breast cancer survivors who have become warm wonderful friends and I am thrilled for the overwhelming support they have.

The frustration seems even more puzzling in light of the fact that I am a cancer survivor myself. I was diagnosed in 2010 with advanced primary peritoneal ovarian cancer, the most lethal of all gynecological cancers with an alarmingly small overall survival rate. So for the past two years of chemotherapy and difficult treatment, I have struggled to suppress what feels like a petty sentiment about all the pink attention. If I just own up to it, I feel left out and I really want a parade with everyone wearing teal in support of ovarian research and care. My cancer! My body part! A cure for me!
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Profits Are Up at Massachusetts Health Plans – Should You Be Upset???

Major Massachusetts health insurers all reported higher net income for 2011 than for 2010. The Boston Globe makes the profit numbers sound big, calling them “sharply higher” and reporting that executives collected more pay. And indeed, the profits seem large on an absolute basis: $38.5M for Fallon, $87.6M for Tufts, $93.5M for Harvard Pilgrim and $136.1M for Blue Cross. But actually the dollars are quite small when considered in context.

The $136.1M Blue Cross figure equates to less than $50 per member per year (they have 2.8M members), which is equivalent to about 2 primary care co-pays or about 1 day of what my business pays for a family premium.

CEO compensation is quite restrained as well. The Blue Cross and Fallon CEOs are in the $800,000 range, or about what a moderately successful orthopedist makes. At $1.2M, Harvard Pilgrim’s CEO is getting close to the income of a typical fertility specialist, and at $1.7M the Tufts CEO is at the level of a law firm partner. They are far from the highest paid people in Massachusetts and frankly I don’t see how they could be expected to make less.

With that said, I’m definitely unhappy with the fact that premiums have risen relentlessly. We’ve experienced annual double digit health insurance premium increases since opening our consulting firm 10 years ago. None of our other major expenses have grown at that pace.

Health plans aren’t the biggest cause of cost increases. Pressures come from providers (hospitals and physicians), suppliers (pharma and device), employers (who fail to embrace better managed care) patients (through increased demand) and government (through reimbursement policies and regulations). But for too long health plans were overly complacent about overall costs. Plans are becoming more aggressive about cost control now as they react to demands from customers, regulators and the public. Massachusetts plans have been creative about rolling out new benefit designs and payment plans that preserve quality and control cost.

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Buckle Up

Rob Lamberts, MDLipitor can destroy your liver.

Back surgery can leave you paralyzed.

People who take Chantix might kill themselves.

You may never wake up from a simple surgery.

These statements are all true.  They also are very confusing to many of my patients when I am prescribing drugs or recommending surgery.  What should they do when they hear such bad things about drugs, surgeries, or procedures?  How much do they risk when they follow my advice?

It’s a hard world out there, with the attorneys advertising on TV about drugs my patients have taken, with the websites devoted to the harms brought on by a drug or an immunization, with Dr. Oz and other seemingly smart people telling them things that are contrary to my advice, and with friends and neighbors who give dire warnings about the dangers of following my advice.

There are so many voices out there competing with mine, that I sometimes spend more time reassuring than I do anything else.  A doctor in our practice believes that Dr. Oz ought to issue a statement to doctors whenever he voices another controversial opinion as gospel fact so that we can be ready with our counter-arguments.

What can doctors do?  We can’t quiet the other voices that speak against us.  In truth, those voices have an important role in preventing us from becoming comfortable and dogmatic in our beliefs.  So how do I combat such a heavy current against our advice?

By talking about seat belts.

Seat belts can kill you, you know.  You can be trapped inside your car by your seat belt and not be able to get out before your car explodes.  It’s not a fable; it can really happen.

You may be sealing your fate to die terribly every time you buckle your seat belt.

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If You Feel OK, Maybe You Are OK

Early diagnosis has become one of the most fundamental precepts of modern medicine. It goes something like this: The best way to keep people healthy is to find out if they have (pick one) heart disease, autism, glaucoma, diabetes, vascular problems, osteoporosis or, of course, cancer — early. And the way to find these conditions early is through screening.

It is a precept that resonates with the intuition of the general public: obviously it’s better to catch and deal with problems as soon as possible. A study published with much fanfare in The New England Journal of Medicine last week contained what researchers called the best evidence yet that colonoscopies reduce deaths from colon cancer.

Recently, however, there have been rumblings within the medical profession that suggest that the enthusiasm for early diagnosis may be waning. Most prominent are recommendations against prostate cancer screening for healthy men and for reducing the frequency of breast and cervical cancer screening. Some experts even cautioned against the recent colonoscopy results, pointing out that the study participants were probably much healthier than the general population, which would make them less likely to die of colon cancer. In addition there is a concern about too much detection and treatment of early diabetes, a growing appreciation that autism has been too broadly defined and skepticism toward new guidelines for universal cholesterol screening of children.

The basic strategy behind early diagnosis is to encourage the well to get examined — to determine if they are not, in fact, sick. But is looking hard for things to be wrong a good way to promote health? The truth is, the fastest way to get heart disease, autism, glaucoma, diabetes, vascular problems, osteoporosis or cancer … is to be screened for it. In other words, the problem is overdiagnosis and overtreatment.

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What I Learned At Haas Business School’s Health Care Conference

There’s a lot of entrepreneurial energy in the Bay Area, but I’m always surprised at how much of it is directed towards health care. As Apothecary readers surely recognize, if we were to rank sectors where the government lies ready to crush the entrepreneurial spirit, health care and education must lead the list.

So, I was excited to have wrangled an invitation to the UC Berkeley’s Haas School of Business‘ annual Business of Health Care Conference, a day-long event held last week. This year’s conference, the sixth, titled Entrepreneurial Solutions to Health Care Challenges, assembled a high-profile group of entrepreneurs, scholars, and investors.

The most informative panel that I attended addressed “Venture Capital – Positioning Health Care Startups for Success,” moderated by Rebecca Lynn of Morgenthaler Ventures. The panel comprised Missy Krasner, also of Morgenthaler Ventures and the former Google executive who launched the now defunct Google Health; Lisa Suennen, a co-founder of the Psilos Group (perhaps the longest-standing pure-play healthcare VC); and Jeff Tangney, former president of Epocrates and founder of Doximity.

Key take-aways from the panel discussion were:

  • Digital health is where the opportunity lies, but both healthcare investors and IT investors bring unhelpful biases to this new sector.
  • Although the Bay Area crowd is loathe to hear it, some of the best new health IT businesses are in places we’d shun – like Michigan or Nashville.
  • Some digital-health entprenreneurs think they have a business, but they only really have a product. Nothing wrong with that, but you’ve got to sell it, not fund it.

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Not Such a Bitter Pill

Whenever I think about health care reform, I am reminded of the song from the film Marry Poppins that goes “Just a spoonful of sugar helps the medicine go down.” You would think from the way Conservatives are always blathering on about the moral fiber of America breaking down because no one takes responsibility for their actions anymore, they could use a spoon full of fiber rather than sugar. They warn about the dangers of the “nanny state,” and “socialist ideas,” and deride progressives for “being enemies of success.” At the end of the day, so the conservatives say, it’s a matter of personal responsibility and personal choice.

You know what? I couldn’t agree more. It really comes down to the choice between a thick glass of Metamucil or a smooth glass of sweet tea. Which would you prefer?

Having everyone take responsibility for their own health care started as a Republican idea. And by and large, Americans agree. But a new poll out this week showed many Americans still have a long way to go in understanding what the new healthcare actually does, particularly on the “individual mandate” portion and in the face of continued right-wing attacks on health reform.

Simply stated, the new health care law makes sure everyone takes charge of their own care and gets affordable insurance, because when people without it get sick, the costs get passed down to the rest of us. For health insurance to work, it’s necessary to include people who are healthy to help pay for those are sick. Under the ACA, you can keep the coverage you have. Or, if you don’t like your plan, or don’t have one, you can pick an affordable insurance option to take personal responsibility for yourself and your family.

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XEROX HIMSS12 Post-Game Show

Plan on joining us for a TweetJam today moderated by Matthew Holt.

Never participated in a TweetJam before? It’s simply a time to gather on twitter around a particular topic and learn from each other. Anyone can ask, or answer, a question. All you have to do is log in to Twitter, follow us at the Twitter handles @THCBStaff and @ServicesatXerox and use the hashtag #HealthITJam to participate in the discussion.

See you there at 2:30 EST.

I Had Asperger Syndrome. Briefly.

For a brief, heady period in the history of autism spectrum diagnosis, in the late ’90s, I had Asperger syndrome.

There’s an educational video from that time, called “Understanding Asperger’s,” in which I appear. I am the affected 20-year-old in the wannabe-hipster vintage polo shirt talking about how keen his understanding of literature is and how misunderstood he was in fifth grade. The film was a research project directed by my mother, a psychology professor and Asperger specialist, and another expert in her department. It presents me as a young man living a full, meaningful life, despite his mental abnormality.

“Understanding Asperger’s” was no act of fraud. Both my mother and her colleague believed I met the diagnostic criteria laid out in the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition. The manual, still the authoritative text for American therapists, hospitals and insurers, listed the symptoms exhibited by people with Asperger disorder, and, when I was 17, I was judged to fit the bill.

I exhibited a “qualified impairment in social interaction,” specifically “failure to develop peer relationships appropriate to developmental level” (I had few friends) and a “lack of spontaneous seeking to share enjoyment, interests, or achievements with other people” (I spent a lot of time by myself in my room reading novels and listening to music, and when I did hang out with other kids I often tried to speak like an E. M. Forster narrator, annoying them). I exhibited an “encompassing preoccupation with one or more stereotyped and restricted patterns of interest that is abnormal either in intensity or focus” (I memorized poems and spent a lot of time playing the guitar and writing terrible poems and novels).

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PCORI Paddles the Potomac

Cynics say Washington is the city where good ideas go to die. A promising strategy for holding down health care costs in the Obama administration’s reform bill – providing patients and doctors with authoritative information on what works best in health care – should provide a classic test of that proposition, assuming the law survives the next election.

Experts estimate anywhere from 10 to 30 percent of the health care that Americans receive is wasted. It is either ineffective or does more harm than good. To put that in perspective, waste costs anywhere from $250 billion and $750 billion a year, or as much as three-fourths of the annual federal deficit.

Yet every effort to curb wasteful spending (health care fraud, though pervasive, is estimated at less than a quarter of the total) has come up short. Neither Medicare and Medicaid’s efforts at government price controls nor the insurance industry’s efforts at managing care has succeeded in stopping health care spending from rising at twice the rate of the overall economy. Only the recent deep recession curbed costs, and that was because people lost their insurance when they lost their jobs and stopped going to the doctor. The bill for that postponed maintenance isn’t in yet.

For over a decade, the health policy world has held out comparative effectiveness research – comparing competing approaches to treating disease – as one possible solution to eliminating waste in the health care delivery system. If only doctors and patients knew what worked best, knew what worked less well than advertised, and knew what didn’t work at all, they would, through better-informed choices, gradually eliminate much of the waste in the system.

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