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Commentology

• 1

Rick Peters, commenting on John Halamka’s post, the "Broken Window Effect" …

"Speaking of downtime – have you ever determined why your organization,
mine, and virtually everyone in health care does routine scheduled
system downtimes on Saturday nights? I understand the theory that it
gives you Sunday to recover, but there isn’t an ER in the country that
isn’t busiest Friday night, Saturday night, Sunday late
afternoon/evening, and Monday night (Tuesday if it’s a three day
weekend). More admissions to our institutions occur at those busy ER
times than at any other time. I would think that physicians in IT
organizations could change this – do routine downtime on Wednesday
night, and in reality do it Thursday morning between 3AM and 5AM –
that’s when things are quiet."

Maggie Mahar has this to say in the thread on Matthew’s "Critical of Critical"" post …

"As for group practice vs. solo practice–solo practice is becoming economically unaffordable. More and more younger doctors recognize this, and would prefer to work in a very large group, on salary. The Dartmouth reserach also confirms that the most efficient outcomes (high quality at a lower price) come in multi-specialty centers where docs are on salary."

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Not exactly health care, but follow the money…

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By Matthew Holt

400pxphotos_newyork1_032Michael Lewis has returned from writing about Jim Clark, technology, baseball and football to his first
topic; finance. (Liars Poker is still the best book about Wall Street ever) His two part piece with hedge fund manager David Einhorn this weekend in the NY Times is one of the best things I’ve seen on the current financial crisis and what to do about it.

It’s called The End of the Financial World as We Know It and How to Repair a Broken Financial World. (I recommend reading them both straight through). And yes, Lewis wants more transparency and more regulation.

Paul Krugman estimated last month that the share of GDP going to the financial sector increased from 5% of GDP to 8% of GDP over the past 30 years or so. What did exactly we get for the extra 3% of the economy that was extracted by Wall Street? The answer is pretty evident. And of course lots of other sectors of society, generally inhabited by people earning significantly less money, have suffered pretty directly as a result.

Of course, there’s another sector of the economy that’s increased its share of the GDP by an even greater amount in roughly the same time period (from about 9% to about 17%). No prizes for guessing which one.

Anyone care to justify what value that sector has provided?

Reprise….Critical of Critical

By Matthew Holt

For those of you who had better things to do than spend last week reading wonkish blogs, I point you towards my article about Tom Daschle’s book. In particular I encourage you to look deep in the comments, for a particularly fun spat between me and a reader called Nate–the type of spat that used to be very common on TCHB but sadly has become a little rarer now we’re all grown up!. The original piece is here and the comments get juicy around Jan 3.

Outlook for health stocks clouded by uncertainty about Obama’s health strategy

By DON JOHNSON

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Although I wrote months ago that health executives weren’t very concerned about the elections, I think they have to be now.

Many health stocks are depressed and they will be until the
uncertainty about Obama’s proposed nationalizing of the health
insurance markets is resolved. We don’t know exactly what he’ll try to
get through Congress. And we don’t know whether the GOP will be able to
kill or modify Obama’s plans. Clinton had basically the same majorities
in the House and Senate that Obama will have, and he couldn’t get
Hillary care enacted.

The public mood, of course, is much different today. Insurers shoot
themselves in the foot every day, and consumers and politicians are
sick of them. They are much harder to defend today than they were in
‘93 and ‘94. So I think enough GOP senators will support Obama to get
something done.

But the markets aren’t sure, yet. Uncertainty is a market killer.

In addition, with higher co-pays and deductibles, the health
insurance and health care markets are acting much more like normal
markets despite all of the governmental distortions.

This is hurting demand for insurance, medical devices and medical
services. This is shown in the depressed prices of hospital company
stocks.

So, if you’re going to play the health ETFs, play the technicals as
much as the fundamentals, which are very cloudy at this point, imo.

A me-too strategy for me-too drugs

• 1

By DAVID E. WILLIAMS

AstraZeneca appears set to follow Merck into the market for “bio-similars.” (See AstraZeneca may join generic rush.)
Congress and the media tend to portray biosimilars are analogous to
generic chemistry-based pharmaceuticals, and therefore believe that
they will lead to much lower prices as a result of the commoditization
of these products. If all goes according to plan, that should cut the
price of biologics by 50 to 95 percent as has been the case for generic
versions of traditional pharmaceuticals.

Pharma and biotech companies aren’t seeing it this way and neither
am I. Although they won’t say so, pharma companies are starting to
realize that biosimilars –which unlike traditional generics cannot be
subsituted by a pharmacist for a branded product– are really like
me-too products within a class of drugs. That’s exactly the model
that’s enabled multiple blockbusters within a given class in the
mainstream pharma business, and led to higher spending overall.
Biosimilars are unlikely to be a lot cheaper than the products they
copy, and they will have all the sales and marketing costs associated
with a branded product, plus some of the development costs. Don’t be
surprised if some biosimilars are actually priced higher than
the original products, based on some real or perceived improvement in
efficacy or safety. That’s what happened when me-too drugs like Lipitor
entered the statin market. (See Generic biologics — or Me Too Drugs 2.0? for more details.)

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A new year’s resolution for greater hospital transparency

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By Paul Levy

Just thinking, along the lines of a New Year’s resolution. What if all
of the hospitals in the Boston metropolitan area — academic medical
centers and community hospitals — decided as a group to eliminate
certain kinds of hospital-acquired infections and other kinds of
preventable harm? And what if they all committed to share their best
practices with one another and to engage in joint training and case
reviews in these arena? And what if they all agreed to publicly post
their progress on a single website for the world to see?

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Can the physical examination save us from the dehumanization of medicine?

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By ROBERT WACHTER

In last week’s NEJM, physician-author Abraham Verghese paints a disturbing picture
of a medical world in which technology has morphed from tool to object,
the patient relegated to a supporting role. To me, Abraham has nailed
the diagnosis but not the treatment.

I had the distinct pleasure of getting to know Abraham when we both served on the board of the ABIM (actually I came to know his work 15 years earlier, when I reviewed his bestselling book, My Own Country, for the NEJM). Abraham is a romantic and a traditionalist, and in last week’s New England Journal
piece he poignantly lays out a problem he has fretted about for years:
namely, that information technology is dehumanizing the practice of
medicine. Describing rounds with his ward team at Stanford, his new
academic home (he was recently recruited there from the UT-San
Antonio), he recalls:

When I stroked a patient’s
palm and caused a twitch of the mentalis muscle under the chin — the
palmomental reflex — it was as if I were performing magic. Still, the
demands of charting in the electronic medical record (EMR), moving
patients through the system, and respecting work-hour limits led
residents to spend an astonishing amount of time in front of the
monitor; the EMR was their portal to consultative teams, the pharmacy,
the laboratory, and radiology. It was meant to serve them, but at times
the opposite seemed true.

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The Downfall of AIG

By ROBERT LASZEWSKI

Those of you outside of Washington, DC likely missed the Washington Post’s three-part investigation of the events leading to the downfall of AIG.

It makes for good holiday reading. I highly recommend the series to you.

Knowing the culture at AIG from many years of activity with the company and its leadership, I can tell you the story certainly has the culture right.

While this is not a health care story per se, it is a story about risk taking and understanding, and never getting cocky about, risk. AIG
execs argued for years they really had no risk in their credit default
swap business. My experience is that when someone is willing to pay you
lots of money to lay a risk off on you–in this case a whopping $80
billion of exposure–there is risk.

You can read the full report here.

Critical of Critical

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By Matthew Holt

Like legions of other wonks when I discovered that Tom Daschle was going to be Obama’s point guy on health care, I sent off for a copy of his book Critical. It’s a fast and easy read, but in its examination of the problem it doesn’t add much to superior books on what’s wrong with health care (much of the first section reads like an undergrad’s attempt to summarize Jonathan Cohn’s Sick) and there are some pretty weak logic flows and basic editing throughout (he refers to the book Uninsured in America on p155 as though it’s already been introduced before it actually gets introduced on p161). But ignoring all that, what does Daschle suggest we actually do?

First, he promotes himself as a scholar of failed attempts at health reform past, and of course a witness to the most recent attempt.

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