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Above the Fold

Pharmaceutical Research Expenditures and Industrial Policy

Jan 3, 2011

By FRANK PASQUALE, JD

Anyone familiar with pharmaceutical industry restructuring will not be surprised by this prediction from the FT’s John Gapper for 2011:

A drugs company will drop early-stage research. Big Pharma has struggled for a decade with a dearth of potential blockbusters. Companies such as GlaxoSmithKline have restructured and slimmed down their research arms but the sector remains troubled, as the departure of Jeff Kindler, Pfizer’s former chief executive, on the grounds of “exhaustion” indicates.

The obvious course with something that is not working is to drop it. Shire Pharmaceuticals pioneered a strategy of outsourcing early-stage research to smaller companies and focusing on developing and trialling promising drugs. This will be the year when one of the industry’s biggest takes a similar tack.

Gapper seems pretty unworried about this transition, and perhaps from the standpoint of pure economic theory it makes little difference whether research is conducted in-house or purchased from other, smaller firms. But as a matter of public relations and political economy, this is a troubling development.

The Post-R&D PR and Jobs Crises

First, the pharmaceutical industry has long justified its profits by arguing that it invests in research and development. For those who favor a market-based approach to drug research, this is a vindication of laissez-faire. Rather than relying on the heavy hand of government to try to direct the research done at pharmaceutical firms, we can expect the “invisible hand” of the market to spin off solutions for everyone’s problems–from the richest to the poorest. Innovations eventually filter down from the highest-income individuals to those with fewer resources. Spending by the wealthy on health care leads to investment in research infrastructure that ultimately redounds to the benefit of all.Continue reading…

New Year’s Resolution Diets

Jan 3, 2011

By HERBERT MATHEWSON, MD

A NEW YEAR’S RESOLUTION IS SOMETHING THAT GOES IN ONE YEAR AND OUT THE OTHER.
– attributed to both Oscar Wilde
and Anonymous
– just another reminder not to believe
everything you read on the web

It is very hard not to write about New Year’s resolutions at this time of year since almost everyone (83%) say they make them, and the majority of us (64%) are not following them six months later. Just one Google search turned up a myriad of medical New Year’s resolutions from a variety of medical institutions and medical newsletters. Some were even age-restricted; “Parental Resolutions” and “Children Resolutions” (3 different age groups). Most seem related to eating healthier, exercising more, losing weight, and new this year, “refrain from bullying”.

New Year’s resolutions probably originated in 156 B.C. when Janus, the two-faced God able to look both forward and backward at the same time, was selected as the symbol of January. Julius Caesar really closed the deal in 46 B.C.when he decreed that January would be the first month of the year. Of course, now-a-days we “have an app for it”.

One problem with resolutions is that they usually exhibit some ambiguity or are overly general, without specificity. For instance, how does one “eat healthier”? Oneprofessor of nutrition ate Twinkies, Dorrito Chips, and Oreos for 10 weeks and lost 27 pounds. His ‘bad cholesterol dropped by 20%, his “good” cholesterol increased by 20%, and his triglyceride level dropped by a whopping 40%. He did this by lowering his calorie intake from 2600 calories a day to under 1800. And that was his point. Weight loss is a result of reduced calories alone. The mix of carbohydrates, fats, and proteins is not important in a “weight-loss diet”. Any diet works, if it reduces your calorie intake.

What Would A Truly Patient-Centered ACO Look Like?

Jan 3, 2011• 14

By KENT BOTTLES, MD

Health care leaders are busy talking to attorneys and consultants about how to set up Accountable Care Organizations (ACOs). A recent Advisory Board survey found that 73 per cent of hospital finance executives said that creating such an organization was a top priority for their health system.

Last year my most popular keynote topic was patient-centered medical home creation; this year everyone wants a presentation on ACOs.

However not everyone has jumped on the ACO bandwagon. Bruce Bagley, MD of the American Academy of Family Practice was recently quoted as saying, “There are probably no experts about ACOs. It’s a developing concept.” And Jeff Goldsmith, PhD, of the University of Virginia stated at the same conference: “I think this is a stupid idea. Managed care without the risk – that’s like gin and tonic without the gin. How do you end up making choices if you’re not forced to make them?”

I started thinking about what an ACO would look like if it was truly patient-centered. What if we designed an ACO that gave patients what they say they really want?

Don Berwick wrote an article in Health Affairs in 2009 that examined what patient-centered should mean, and since he became the head of Medicare in 2010 it might make sense to start there. After all, Medicare is pushing the ACO concept by creating pilot projects and encouraging the shift from fee for service payments to global payments for medical care reimbursement.

The “Unreasonable” Premium Increase Rule

Jan 3, 2011• 7

By ROGER COLLIER

HHS has now released its final set of draft regulations for provisions of the Affordable Care Act scheduled to go into effect early in 2011. This last regulatory publication—actually a “notice of proposed rulemaking” inviting comments prior to implementation—provides proposed rules for disclosure and justification of “unreasonable” premium increases.

The proposed “confess and explain” regulation requires insurers to publicly disclose rate increases in the individual or small group markets of ten percent or more in 2011, or above individual state-by-state thresholds starting in 2012. The thresholds will be set by HHS, presumably in conjunction with the states.

Although the proposed rules require review either by HHS or, if a state has an “effective rate review system,” by the state, no authority is provided for the rejection or modification of rate increases. Apparently, the Congressional drafters of the ACA language—which the proposed rule generally follows—felt that the threat of a premium increase being called unreasonable would have an adequate sentinel effect. However, insurers who show a “pattern or practice of excessive or unjustified premium increases” can also be excluded from insurance exchange participation.

Ba-Ba-Ba-Ba Boom!

Jan 3, 2011• 1

By RICHARD REECE, MD

January 1, 2011 -Yes, yes, it’s true. Today 79 million baby boomers, born from 1946 to 1964, start turning 65.

Yes, yes, it’s true. Boomers begin qualifying for Medicare.

Yes, yes, it’s true. If my math is right, this means some 12,015 boomers each day over the next 18 years will enter the Medicare ranks.

That’s the biggest news this New Year’s Day. The second biggest news is the information technology boom, triggered by IPad, Kindle, and the social media. The third biggest news, connected to the first two, is the health reform law and its impact on our unsustainable entitlement programs.

Let’s take these pieces of news, one by one.

Boomers

Boomers, whether by Botox, cosmetic surgery, exercise, antioxidants, tobacco cessation, or life-style and life-savings medical technologies, plan to maintain their youth, and to cede nothing to generations that precede or follow them. That’s if things do well. Otherwise, aging boomers who become ill, may ask , “Why me? What the hell happened?”

Does Medicare Have it Right in 2011?

Jan 3, 2011• 3

By ED PULLEN, MD

Starting in 2011 with the regulations required by the PPACA Medicare will mandate copay and deductible free preventative services for our older Americans. This is great news for primary care physicians. I’m a family physician, and have struggled for years with the fact that just about every private insurance plan covers an annual physical exam, but Medicare did not. What this anti-intuitive dichotomy accomplished was bringing in my relatively healthy 30-something patients for a physical exam each year, while for my 70 year old for whom far more preventative services were recommended by the United States Preventative Services Task Force was not covered for a preventative exam ever. Not annually, not every 3 years, just once at age 65 to last their lifetime.

As primary care physicians we tried to our best to squeeze preventative care into visits primarily for other complaints. At a visit of my diabetes patients every 3 months I’d try to focus on the diabetes and save enough time to review immunization status, assure breast and colon cancer screening was up to date, help med decide if they wanted prostate cancer screening, …. I’m looking forward to being able to ask my seniors to schedule a preventative care visit annually now and being able to focus on these issues without having to eke out time in a problem oriented visit.

Still I have to say if the goal is to provide incentive to older Americans to go to their physicians for services that will really make a difference in the health of the Medicare population problems I think congress has it wrong. If we want to prevent unnecessary hospitalizations and expensive complications from neglected medical problems, and have the biggest impact to reduce the burden of expensive medical complications and I believe the most efficacious preventative services we can offer in health care are secondary prevention and disease management. I’d love to think that by primary prevention, education, and physical exams I can help patients improve their health and subsequently reduce costs and get better outcomes. The problem is that there is little evidence that this is the case. This new regulation, offering a free once annual preventative care visit may find some early cancers, improve immunization rates and make us feel like we are being proactive.

Health Alert: Health and Education

Jan 1, 2011• 7

By JOHN GOODMAN, PhD

I believe I am one the few commentators on the Internet who routinely compares the fields of health and education (see previous posts here and here). The reason: lessons from one field are often applicable to the other.

The parallels are obvious: In both fields (1) we have systematically suppressed normal market forces; (2) the entity that pays the bill is usually separate from the beneficiaries of the spending; (3) providers of the services see the payers, not the beneficiaries, as their real customers and often shape their practice to satisfy the payers’ demands — even if the beneficiaries are made worse off; (4) even though the providers and the payers are in a constant tug-of-war over what is to be paid for and how much, the beneficiaries are almost never part of these discussions; and (5) there is rampant inefficiency on a scale not found in other markets.

Long before there was a Dartmouth Atlas for health care, education researchers found large differences in per pupil spending (more than three to one among large school districts, e.g.) that were unrelated to differences in results. In fact, study after study has found no correlation between education spending and education results. (See Linda Gorman’s summary at Econlog.)

Internationally, the parallels continue. Just as the United States is said to spend more than any other country and produce worse outcomes in health care, the same claim is now made for education.Continue reading…

A Bipartisan Agreement on Health Care Was Possible in 2009

Jan 1, 2011• 6

By ROBERT LASZEWSKI

Readers of this blog have often heard me say that a bipartisan agreement on a health care bill was possible in 2009–driven from the Senate Finance Committee. I have continually made the point that the two sides were much closer than is commonly believed–or partisans are willing to concede.

Every time I post this, the overwhelming reaction is that I am wrong–with one side inevitably blaming the other for a lack of good faith in the discussions.

Bara Vaida had an interview in Friday’s Kaiser Health News with Mark Hayes, who was the lead Republican health staffer on Senate Finance at the time and had a “clear view” of the negotiations.

Here are the key excerpts:

Q: [Vaida] Key Democrats, including Senate Majority Leader Harry Reid, D-Nev., recently said their biggest regret was allowing the Senate Finance Committee leaders, your former boss Sen. Grassley and committee chair Max Baucus, D-Mont., to spend so much time trying to forge a bipartisan compromise on health care. What do you think about that criticism?

A: [Hayes] We really devised much of the health care framework even before the Gang of Six Senate (Finance Committee) leaders started meeting. In the summer of 2008, Sens. Grassley and Baucus held a summit and we were chugging along with planning our roundtables and it is my understanding that the leadership was frustrated with us that we were moving too quickly and they wanted us to slow down. We got agreement on 80 percent of the framework even before the Gang of Six started meeting to take on the remaining 20 percent. People were naturally impatient but the complexity of the job, connecting the dots and making the model work is a huge challenge so those who pushed for it to be done quickly were watching the clock and likely didn’t have a full appreciation for the issues we were attempting to resolve. The idea that the health care law could be done quickly and be done right is like saying you can go to the moon on the first try.

Critical Review of Medical Literature

Jan 1, 2011• 4

By MARYA ZILBERBERG

Today I am launching a series of posts on how to read medical literature critically. The series should provide a solid foundation for this task and dove-tail nicely with some of the more dense themes that occur on this blog. Who should read the series? Everyone. Although the current model of dissemination of medical information relies on a layer of translators (journalists and clinicians), it is my belief that every educated patient must at the very least understand how these interpreters of medical knowledge (should) examine it to arrive at the information imparted to the public.

At the same time, both journalists and clinicians may benefit from this refresher. Finally, my own pet project is to get to a better place with peer reviews — you know how variable the quality of those can be from my previous posts. So, I particularly encourage new peer reviewers for clinical journals to read this series.

First, a conflict of interest statement. What comes first — the chicken or the egg? What comes first — expertise in something or a company hiring you to develop a product?

Well, in my case I would like to think that it was the expertise that came first and that Pfizer asked me to develop this content based on what I know, not on the fact that they funded the effort. At any rate, this is my disclaimer: I developed this presentation about three years ago with (modest) funding from Pfizer, and they had it on a web site intended for physician access. Does this mere fact invalidate what I have to say? I don’t think so, but you be the judge.

The Tea Party Conservative Strategy for 2011

Dec 31, 2010• 39

By ROBERT REICH

Next week starts the new Congress, and with it the Tea Party conservatives. What’s their strategy? What will they rally around?

They’ll grouse endlessly about government spending but I don’t think they’ll use any particular spending bill to mobilize and energize their grass roots. The big bucks are in Social Security, Medicare, and defense, which are too popular. And their support for a permanent extension of the Bush tax cuts will make a mockery of any argument about taming the deficit.

Nor will they focus on the debt ceiling. Their opposition to raising it will generate a one-day story but won’t rally the troops or register with the public. Most Americans aren’t particularly interested in the debt ceiling, don’t know what it means, and don’t feel affected by it.

Instead, I expect their rallying cry will be about the mandatory purchase of health care built into the new healthcare law. The mandate is the least popular, and least understood, aspect of that law. Yet it’s the lynchpin. Without it, much of the rest of the law falls apart: It’s impossible to cover all high-risk Americans, including those with pre-existing conditions, unless those at far lower risk are required to buy insurance.

Knowing they don’t stand a chance of getting a direct repeal of the mandate (even if they could get a majority in the House for it, they won’t summon 60 votes in the Senate, and have no possibility of overriding a presidential veto), they’ll try to strip the federal budget appropriation of money needed to put the mandate into effect. This could lead to a standoff with the White House over government funding in general, and a possible government shutdown.