Dispatches from the Field, 2/25/08

For better or worse, these are the kinds of hard discussions we have to have as we look at our options for the ailing healthcare system:

Prevention is Good Medicine, but it’s Not a Fiscal Panacea
Prevention saves lives; it is the right thing to do. But prevention does not save money

http://blogs.usatoday.com/oped/2008/02/prevention-is-g.html

One of my favorite economists is Dean Baker. His “Beat the Press” Column tackles the ignorance and hidden agendas in economics. As you can imagine, there’s a lot of material when the issue is the economics of healthcare!

When it Comes to Health Care the NYT Is Protectionist

Just yesterday the NYT editorial board was complaining about the threat of protectionism in discussing Senator Obama and Clinton’s trade policies. Today, the editorial board discusses Medicare’s financial problems and never once mentions the extent to which this is caused by protectionism.

The basic point is very simple. Every other wealthy country provides high quality health care at a far lower price than in the United States. If we want to lower cost then an obvious way would be to try to take advantage of these lower cost systems. It is easy to develop mechanisms that would allow for Medicare beneficiaries to take advantage of lower cost systems.

The argument for the gains from trade in medical services is exactly the same as the argument for gains from trade in cars and clothes (we can even use the same graph, we just have to relabel the axis), except the benefits are likely to be much larger in the case of medical care. It is inconsistent for the NYT to be so committed to eliminating trade barriers in manufactured goods but willing to tolerate much costly barriers to trade in medical services.

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=02&year=2008&base_name=when_it_comes_to_health_care_t

In the interest of full disclosure, it should be noted that I am working on the Austin health insurance program mentioned in this article.

Texas Urban Areas Work to Bring Three-Share Programs to the Working Uninsured

HealthLeaders-InterStudy, a leading provider of managed care market intelligence, reports that five Texas urban areas — Austin, Dallas, El Paso, Galveston and Houston — have made various levels of progress toward forming health benefit pools
authorized last year by the Texas legislature. According to the latest Texas Health Plan Analysis, these three-share health benefits programs are designed to provide coverage access to small businesses who feel they have been priced out of the healthcare market.

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/02-26-2008/0004762435&EDATE=

This is shaping up to be a disappointment. The new office created by the FDA “will not get the ultimate power to sign off on label changes or recommendations to remove a drug from the market.”

FDA Unveils Plan to Boost Oversight of Drugs Once They Are on Market

The Food and Drug Administration unveiled a new effort to bolster its oversight of drugs after they’re on the market, in the agency’s latest response to years of criticism about its handling of medication safety issues.

http://online.wsj.com/article/SB120405750657094407.html?mod=wsjagent

An Oldie But a Goodie: Escape Fire

Here’s a link to a personal review I wrote for Don Berwick’s Escape Fire: Designs for the Future of Health Care. If you haven’t read it, I highly recommend it for setting the context and the mission.

How Do You Get People Who Can Afford it to Buy Health Insurance?

Do you scare the dickens out of them? I’d like to meet the creative team behind this commercial brought to the people of Ontario, Canada by their Workplace Safety and Insurance Board. (this video is definitely not for sensitive viewers, although you might just see it on TV if you’re channel surfing in Ontario)

Dispatches from the Field – January 21, 2008

For Every Vice, There’s a Price
As part of an ongoing effort to curb the runaway cost of providing health benefits, a small but growing number of companies are charging workers for habits like smoking, overeating and failing to exercise.
http://money.cnn.com/2008/01/15/pf/102902056.moneymag/index.htm?postversion=2008011510

The Truth About Mandatory Health Insurance
WSJ Op-Ed – typically hard nosed WSJ editorial about getting people coverage, but some good points about catastrophic vs. comprehensive insurance for young people.
http://online.wsj.com/article/SB119941501118966929.html

A Health-Insurance Solution
The Health Care Choice Act would allow residents in one state to buy health insurance that is available in and regulated by another state.
http://online.wsj.com/article/SB119742880091722751.html?mod=sphere_ts

Employers Tell Workers To Get Healthy or Pay Up
In an effort to motivate workers to kick unhealthy habits, U.S. companies are hitting them where it hurts: in their wallets.
http://online.wsj.com/article/SB119674051866712859.html?mod=sphere_ts

The Nation’s Health Dollar

“Physician and Clinical Services” includes offices of physicians, outpatient care centers, and medical and diagnostic laboratories. “Other Spending” includes dentist services, other professional services, home health, durable medical products, over-the-counter medicines and sundries, public health, other personal health care, research, and structures and equipment. Source: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group.

Dispatches from the Field – January 2, 2008

Hospitals Slow in Heart Cases, Research Finds

In nearly a third of cases of sudden cardiac arrest in the hospital, the staff takes too long to respond, increasing the risk of brain damage and death, a new study finds.

Researchers estimate that the delays contribute to thousands of deaths a year in the United States.

http://www.nytimes.com/2008/01/03/health/research/03heart.html?ex=1357016400&en=3d9a627e28ec54c9&ei=5088&partner=rssnyt&emc=rss

Fewer Small Firms Offer Health Insurance

Fewer small employers offered health insurance this year, despite the widespread availability of new, lower-cost high-deductible insurance plans, a survey released today by benefit firm Mercer shows.

Advocates of the high-deductible plans touted them as one solution to the growing number of uninsured, expecting the plans to appeal to small employers, who would continue to offer health insurance as a result.

“That’s not happening,” says Blaine Bos, a Mercer partner and one of the study authors. “In fact, the reverse is happening.”

http://www.usatoday.com/money/industries/insurance/2007-11-19-health-insure_N.htm

 

Students Face Health Issues Without Insurance After College

Patrick Rastelli ‘08 had hoped to take a year off after graduating from Brown this spring. But after some thought, Rastelli decided to travel last summer instead, and when he graduates, he wants to get a job as quickly as possible. He’s not seeking prestige or money, but rather something most college students take for granted: health insurance.

http://media.www.browndailyherald.com/media/storage/paper472/news/2007/10/29/CampusNews/Graduating.To.The.Ranks.Of.The.Uninsured-3061887.shtml

Report Links Higher Rates of Uninsured and Suicide

The higher the percentage of residents in a state who say they can’t afford health care, the greater the prevalence of serious depression and the higher the suicide rate in that state, suggests a report released to USA TODAY.

http://www.usatoday.com/news/health/2007-11-28-healthcare-suicide_N.htm

Who Is Involved in the IT Selection Process at Your Health Care Facility?

Forty-two percent of nurses spend four or more hours a day using IT, but just 15% of staff nurses and 27% of nurse managers are involved in the IT selection process at their facilities, according to a survey of nurses by CDW Healthcare.

Results are based on a July 2007 online survey of 1,028 nurses from a variety of health care settings.

 For complete story, click here.

Dispatches from the Field – November 21, 2007

Interest in Wellness Programs Grows: Survey

More employers are providing financial incentives designed to drive employee participation in wellness efforts, a survey shows.

http://www.businessinsurance.com/cgi-bin/news.pl?newsId=11554

Employers Shift Focus to Prevent Obesity

The seven most common chronic diseases — six of which can be caused or worsened by obesity — are costing employers $1.1 trillion in lost productivity, a recent study says.

http://seattletimes.nwsource.com/html/health/2003997221_webobesity06.html

Program Quantifies Costs of Chronic Conditions

It’s no secret that chronic medical problems, such as high blood pressure and low back pain, can mean time off the job. What’s hard to quantify, is how much that absenteeism can cost a company. Until now.

http://www.bizjournals.com/pittsburgh/stories/2007/11/05/story2.html?b=1194238800^1544416

Consultant: Prepare for PHRs

Patients will demand personal health records, so health care organizations should be preparing technology and privacy models now, a consultant specializing in emerging technologies says.

http://www.healthdatamanagement.com/news/personal_health_records_PHRs_privacy_security25179-1.html

Drugstore Clinics Spread, and Scrutiny Grows

“We’ve got big problems in health care, and this is not the answer,” said Dr. Rick Kellerman, president of the American Academy of Family Physicians. “They are a response, they are a niche market and an economic opportunity, but we still have an underlying primary care crisis in this country.”

Patients, however, have flocked to the clinics, according to a new industry group, the Convenient Care Association.

http://www.nytimes.com/2007/08/23/nyregion/23clinic.html?pagewanted=1&ei=5070&en=0b7cd9bcc251d519&ex=1188792000

Dispatches from the Field – August 13, 2007

Meet the Consumer-Directed HMO

It took a while for a managed care company to combine a consumer-directed plan with a traditional HMO. Health Net of California, taking advantage of the strengths of California’s managed care market, is launching a hybrid product called OptimizerHMO that “provides tools to help [members] make better health care decisions and incentives for demonstrating healthy behaviors,” says Stephen Lynch, president of Health Net.

http://www.managedcaremag.com/archives/0707/0707.news_meetconsumer.html

Health IT Businesses See Rise in Private Equity Investments
Health IT businesses are attracting investors and buyers from private equity firms, a sign that the industry is rife with growth and opportunity, Modern Healthcare reports.

http://modernhealthcare.com/apps/pbcs.dll/article?AID=/20070803/FREE/308030001&SearchID=73289151525029

U.S. Trails 41 Other Countries in Life Expectancy Rates

Life expectancy in the U.S. has reached its highest point ever, but it is exceeded by the rates in 41 other countries, the AP/Arizona Daily Star reports.

http://www.californiahealthline.org/articles/2007/8/13/US-Trails-41-Other-Countries-in-Life-Expectancy-Rates.aspx

Trials and Tribulations at the FDA

The Food and Drug Administration has long been criticized for the extremely lengthy review period that new medical treatments and pharmaceuticals in particular have to endure before their release to the public. The complaint is that the delays in approval costs lives. The Libertarian economist Milton Friedman once proposed that the FDA be abolished in favor of a manufacturer driven drug review process. But the agency has has historically been one of the most important watchdogs for the American public. In 1960, an FDA reviewer named Frances Oldham Kelsey refused to cave in to heavy pressure by Richardson-Merrell pharmaceutical company of Cincinnati to approve its night time sleeping aid in time for a Christmas release. Kelsey’s recalcitrance ended up being fortunate. The drug, thalidomide, was eventually implicated in birth defects that impacted over 10,000 children in 46 countries. Only a handful of the defects occurred in the US, the result of samples distributed by Richardson-Merrel to physicians on a trial basis. The FDA itself was created in response to the horrific conditions in meat-packing facilities described in Upton Sinclair’s The Jungle as well as the proliferation of “patent medicines and nostrums” that were marked as cures for various conditions. Created by small time entrepreneurs as well as companies still in business today, many of these medicines were ineffectual in treating their advertised ailments and some caused serious injury and death to consumers.

The thalidomide tragedy that impacted the global community is the oft-cited example of why we need the FDA (in fact, Friedman references it the above citation). But the FDA continues to be criticized for the delays in the approval process. The process has been blamed for creating needless suffering and death when sick patients can’t get access to life-saving but unapproved products. Also, drugs that have been approved are later to have serious side-effects that were completely unanticipated, like Vioxx, which was withdrawn from the market after being linked to increased risk for heart attacks and strokes. At the time of the withdrawal in 2004, over 100 million prescriptions for Vioxx may have been written.

Clearly, the typically lengthy FDA approval process did not catch the problems with Vioxx. The Food FDA estimates that Vioxx may have contributed to over 27,000 heart attacks and sudden cardiac deaths before it was pulled from the market. One of the main problems with FDA oversight of drugs is that it has little authority and less budget to mandate post market surveillance of drugs once they are approved. Numerous studies have outlined the obvious: compared to employees of pharmaceutical companies, FDA researchers are overworked and underpaid, and as result, turnover is high at the agency, further undermining oversight. In its report on the drug safety system in the U.S, the Institute of Medicine identified the lack of regulatory authority, the dismal lack of resources and “lack of transparency” of both the FDA’s Center for Drug Evaluation and Research and the pharmaceutical companies as well as other problems “has compromised the credibility of FDA and of the pharmaceutical industry.”

The problems with FDA are serious and will require major political will to solve. One fact is of note: in the case of Vioxx, a number of private insurers with electronic patient records systems identified the problems before the FDA did. While the post market surveillance program needs to be retooled, electronic patient records could be an important part of the strategy. In essence, monitoring the health data for patients receiving a drug could be a key strategy in post market surveillance. Pharmaceutical companies would be well served by investing in the deployment of Electronic Medical Records in doctor’s offices and by supporting more rigorous post market trials, helping to restore consumer’s trust in themselves and the FDA.