Access, Affordability, Drug price, Healthcare economics, Pharmaceutical, Pharmaceutical prices, Population health, Public health, Uncategorized

The US Pharmaceutical Market, Merciless and Inefficient: Part One

December 29, 2017 No Comments

Market Breakdown in Need of Repair: A three part series

Over the next few weeks, we will be exploring the good, the bad and the ugly of the US pharmaceutical market.

Part one: The Good

True miracles

Part two: The Bad and the Ugly

Generic drug price gouging
Brand name market imbalances
Deceptive marketing

Part Three: Path to the future

“Show me the dead Canadians”
Public private partnerships
Market reforms

Part one: The Good

As this is the holiday season, we will start with what is good: worldwide, the pharmaceutical industry alleviates suffering, saves lives and on occasion, drives breakthroughs in medicine which can only be described as miracles. No one wants to throw out the baby with the bathwater.

In 2013, a revolutionary new treatment for hepatitis C arrived on the market. Gilead Sciences Inc. obtained FDA approval for its new drug Sovaldi. With over a 90% cure rate for this previously incurable and often deadly disease, this was accurately hailed as a medical breakthrough.

In 2016 we learned that Biogen pioneered a miracle cure for a rare disorder of the spinal cord called Spinal Muscular Atrophy. The disease can affect adults and infants and is particularly deadly in its infantile variety. Infantile Spinal Muscular Atrophy, usually diagnosed in the first weeks of a baby’s life, carries with it a swift death sentence. Infants diagnosed with this disorder typically have less than two years to live. Spinraza, sold by Biogen, uses tiny chains of RNA to help repair the nerve cells within the patient’s spinal cord. It is these cells which control voluntary muscles and preserve their function. With repair of these cells, infants with Spinal Muscular Atrophy have been alive for well over four years now.

In 2017 Novartis was the first company in history to receive FDA approval of a human gene therapy to combat cancer, called Chimeric Antigen Receptor (CAR) T-cell therapy. CAR-T therapy has been shown to have remarkable cure rates for leukemia and lymphoma patients who were previously felt to be incurable. With this therapy, the patient’s own white blood cells are genetically modified in the lab and reinjected back into the patient’s bloodstream to kill their cancer cells. This treatment offers a realistic probability for a cure to many patients previously facing imminent death.

This is all good, and we should be grateful.

The problem: US Pharmaceutical prices are skyrocketing.

In 2013, Sovaldi came with a heavy cost: The drug, Sovaldi was priced at $1000 per pill. Typically, patients needed 84 of these pills (one per day) in order to be cured.

Collectively, we bought it. We raised spending on insurance premiums and Medicaid expenditures and hoped for the best.

Subsequently we were treated to these headlines:

$1,000 Pill For Hepatitis C Spurs Debate Over Drug Prices

The cost of Biogen’s new drug: $750,000 per patient

$475,000 Too High a Price for Novartis’s ‘Historic’ Cancer Gene Therapy?

In fact, $750,000 is only the first year’s down payment to Biogen. Spinraza was priced at $750,000 for the first year of treatment and a recurring annual price tag of $375,000 per patient.

More recently, in conjunction with CMS, Novartis came up with a performance-based model: Patients will only be charged $475,000 if the drug works in the first month.

We (you and I) have an ownership stake in these products too:

Many or most of today’s miracle drugs were developed with research which was funded or subsidized by the US taxpayer, in academic medical centers. Shouldn’t the interests of US taxpayers be considered in the pricing of these drugs?

In our next installments, we will look more closely into what is driving these increased costs and what we can do about it.

Wishing you a wonderful 2018,

Happy New year!

Affordability, diabetes, fee-for-service, food, food insecurity, food prescription, food security, Fresh Food Farmacy, Healthcare economics, hemoglobin A1c, Population health, Public health, Quality, Uncategorized

Geisinger’s “Fresh Food Farmacy” – What You Need to Know

December 10, 2017 No Comments

Fast take:

At the Fresh Food “Farmacy,” healthy food is dispensed to food insecure diabetic patients resulting in:

Strikingly lowered patients’ average blood sugar (much better than medications alone)
Improved lives of the patients and their families
Healthcare savings

Healthy Food: Better than Medication, Who Knew?

How does it work?

In Geisinger’s groundbreaking program, diabetic patients who are food insecure receive a prescription for free food. The food pantry is embedded right within the clinic. Patients can pick up their food conveniently, at the time of any medical appointments.

The food pantry provides the patient and their entire family with enough healthy food (and tasty recipes) to provide their family five days worth of fresh healthy meals, each week. This food includes fresh fruit and vegetables, whole grains, fish, and lean meats. In addition to standard diabetes treatment, the Fresh Food Farmacy patients also participated in 15 hours of diabetic education.

The Geisinger food pantry operates differently from other food pantries. While most food pantries accept any donated food, including such things as cupcakes and chips, Geisinger’s food pantry does not accept or distribute unhealthy donations.

Why is this important? Expense and devastating complications

Food insecurity increases the odds of developing diabetes, obesity and poor health.

Diabetes is one of the most expensive medical conditions to treat in America. According to one study in 2013, US healthcare spending for diabetic patients cost $100 billion. 10% of Americans currently suffer from diabetes, and experts believe by the year 2050 33% will suffer from this scourge

But as Geisinger demonstrated, diabetes is amenable to treatment with compassionate, low cost, simple solutions.

Complications of diabetes can be reduced with good blood sugar control.

Given their improved blood sugar control, the Fresh Food Farmacy patients are much less likely to suffer from:

Peripheral vascular disease and subsequent amputations of their feet
Diabetic nephropathy and renal failure necessitating dialysis
Diabetic retinal apathy resulting in blindness
Neurovascular disease and subsequent stroke
Cardiovascular disease and subsequent heart attack

All this and their sex lives improve.

At the recent Becker’s Hospital Review CEO + CFO Roundtable, Geisinger CEO David Feinberg dryly noted, “Oh and by the way, if you’re allergic to any of that, don’t take it.”

Results:

Prior to participation in the Fresh Food Farmacy program, these complex patients’ average hemoglobin A1c (a measure of their average blood sugar) was 9.6. After 12 months in the program, their hemoglobin A1c dropped to an average of 7.5. That’s a 2.1 point reduction. One patient’s hemoglobin A1c went from 13 to normal 6.5!

To put that into perspective, for every point reduction in hemoglobin A1c the risk of death or serious complication is reduced by 20% in these patients. The FDA will approve a new multi-billion dollar drug if it can reduce hemoglobin A1c by 1 point.

Given the educational component to the program, some patients participating in the Food Farmacy program lost weight, some quit smoking and there were improvements in serum cholesterol and triglycerides.

Cost effective? It more than pays for itself!

Stunningly, by providing free food along with the patients’ medications, not only did the patients become healthier, but the total cost of these patients’ healthcare was dramatically reduced, even accounting for the cost of food.

It costs Geisinger about $2,200 per family per year to provide the food prescriptions and diabetic education to this complex group of diabetic patients. This is largely a human resource expense as much of the food is donated. During the year, Geisinger saved over $20,000 dollars per family.

Why are such innovative programs relatively rare?

Today, incentives are misaligned:

In our fragmented healthcare system, often no one is incented to provide innovative solutions which make a difference in people’s lives. Such care requires time, upfront expense and effort. This effort falls squarely on the shoulders of physicians, hospitals and other clinicians, while any cost savings often accrue to a remote insurance company; insurers who may be less than excited about sharing such savings with the patient, premium paying employers, physicians, hospitals and other providers; hence our national focus on pivoting from fee-for service to pay for value health care. When the health insurance plan, the hospital and the doctors all work for one entity, such as at Geisinger, any money they can save stays within the provider community.

Challenge:

If your accountable care organization is thinking of duplicating this great work, Geisinger does have a bit of advice:

Be on the lookout for dangerous drops in blood sugar at the outset. Patients switching from glucose rich diets to healthy food will need their insulin doses adjusted.
Patient engagement is crucial; requiring the patient education classes is integral to their success.
Make use of dietitians, pharmacists, registered nurse health managers, community health associates, coaches etc, so that each member of the care team is functioning at their top of their license.

Access, Affordability, Burnout, Healthcare economics, Physician, Physician burnout, Physician well-being, Population health, Public health, Quality, Uncategorized

Healthcare is sick. Physician Burnout is its symptom. It affects you and you can help.

November 10, 2017 No Comments

The problem:

In one study of musculoskeletal radiologists, the physician burnout rate was reported at 80%!

The rate of physician suicide is twice that of the public at large, and it’s worse for women physicians. 400 physicians commit suicide each year, and experts believe that’s likely an underestimate. Hence stunningly, roughly a million patients a year lose their physician to suicide.

What is physician burnout?

When physicians devote excessive time and effort to useless tasks required by an inefficient system, overactive payers and burdensome regulators, emotional exhaustion sets in.

With depersonalization, physicians lose the ability to be empathetic and often become emotionally distant to patients and families. This can be perceived as callousness or even cynical behavior by patients and their families. This may manifest as an inability to express grief for patients’ or families’ losses. Naturally this negatively affects the patient experience and the patient’s confidence in the physician’s recommendations. These patients are less likely to follow their physician’s advice, resulting in poorer patient outcomes.

Over time, as the physician continues to jump through what they consider meaningless hoops, they begin to experience feelings of low achievement and decreased effectiveness. They begin to feel not only that the bureaucratic button pushing required of them is meaningless, but the actual task of healing begins to lose value for the physician. As physicians begin to view their work as meaningless, the quality of their work suffers.

Physician burnout affects us all: lower quality, higher costs, reduced access

A healthy, high functioning physician is the foundation of a high functioning healthcare system. Yet reports indicate physician burnout rates are worsening nation wide.

Chronic fatigue, alcoholism and drug addiction are all associated with physician burnout.

Burnt-out physicians deliver a lower quality of care, receive lower patient satisfaction scores, have a lower capacity to effectively engage and lead the healthcare team, and their suffering results in lower team morale. Patient safety is compromised. Unnecessary consultations or lab tests are ordered. They are more likely to make medical errors and, suffer medical malpractice suits. The culmination of all this activity drives up healthcare costs, reduces quality and limits access to care.

Why today? Healthcare’s triple threat: Electronic Health Records (EHRs) insurance requirements and government regulations

Physicians have always worked long hours, but now physicians tell me that time wasted jumping through what they consider meaningless hoops is driving them to distraction.

Burnout is related to loss over control of work, disrespectful leadership, increased performance measurement (some of our physician organizations and hospitals are responsible for monitoring and improving over 600 quality metrics!) increasing complexity of medical care, implementation of EHRs and profound inefficiencies in the practice environment. Many (one might venture to say most) EHRs are not optimized to facilitate efficient physician practice.

One physician leader recently told me that his EHR allows monitoring of how many hours each day a physician is logged on to the EHR, entering data. He told me he was shocked at the results: Physicians in his practice are often logged on, writing notes and answering emails for up to 18 hours a day. He can’t believe they can survive with this lack of sleep.

Also contributing to worsening physician stress is a poor balance between effort and reward, lack of community, lack of fairness and values conflict.

How does physician burnout drive up healthcare costs?

Early retirement, reduced physician hours and physician turnover costs directly affect physician employers and practices. The reduced quality of care delivered by burnt-out physicians, the increased medical error rate associated with physician burnout, unnecessary testing and referrals generated by burnt-out physicians and increased medical malpractice risk and malpractice premiums all indirectly contribute negatively to healthcare costs in America.

Path to the future:

A recent Health Affairs blog authored by 11 health system CEOs including Massachusetts’ own Dr. David Torchiana, President and CEO of Partners HealthCare and Dr. Steven Strongwater, President and CEO of Atrius Health offered the following first steps towards a solution;

Health systems need to:

Recognize that physician well-being is critical
View physician well-being as a core priority
Regularly measure physician well-being/burnout
Include these measures in institutional performance dashboards
Allocate the resources necessary
Hold management accountable for improving physician well-being/burnout
Evaluate and track the institutional costs of physician turnover, early retirement, and reductions in clinical effort.
Emphasize leadership skill development
Understand and address more fully the clerical burden
Encourage government/regulators to address the increasing regulatory burden
Reduce the burden of the EHR on all users
Compile and share best practices
Educate their fellow CEOs about the importance of this work

MMS and MHA jointly forming a Physician Burnout Task Force

The Massachusetts Health and Hospital Association (MHA) is partnering with the Massachusetts Medical Society (MMS) and is currently in the process of creating the MMS-MHA Physician Burnout Task Force. This will be composed of physicians and physician group leaders from within both hospital and physician practice environments. The task force work is expected to begin in January 2018 and conclude its work by year end. If you have any information which may be germane to understanding, addressing and successfully combating physician burnout, would you please send it along to:

Steve@defosays.com

Thanks in advance!

Affordability, Behavioral health, fee-for-service, Healthcare economics, Healthcare waste, Population health, Public health, Uncategorized, Unnecessary care

Wasteful healthcare spending hurts us all: Report from the National Affordability Summit

October 2, 2017 1 Comment

Healthcare leaders, policy experts and pundits recently gathered in Washington DC at the National Affordability Summit hosted by NRHI.

Twin themes driven home effectively at the Affordability Summit were:
1. Overspending on US healthcare damages our society.
2. Lots of unnecessary, potentially harmful, and wasteful care is happening and it is fostered by the fee-for-service system.

Overspending on US healthcare can be defined as growth in US healthcare spending greater than the growth of the US Gross Domestic Product (GDP). The US spent approximately $3 trillion on healthcare expenditures last year. As government spending currently accounts for about 2/3 of all US healthcare spending, allowing healthcare spending growth to go unchecked could make the recent Greece debt crisis look like a bump in the road.

This rapidly growing healthcare spending is the driving force behind our federal deficits. Princeton economist Alan S. Blinder has written: “The implication for budgeteers is clear: If we can somehow solve the health care cost problem, we will also solve the long-run deficit problem. But if we can’t control health care costs, the long-run deficit problem is insoluble.”

Overspending on US healthcare damages society by:

Driving impending insolvency at every level of government (federal, state, county and municipal).
Crowding out spending on all other government priorities (social services, education, national defense, public safety, transportation, etc.).
Squeezing employer profits, reducing American competitiveness in world markets.
Raising the cost of US labor, thus discouraging US firms from hiring US workers and encouraging outsourcing jobs overseas.
Raising the cost of US made goods and services in comparison to overseas goods and services.
Capping wage growth. (Healthcare insurance premium growth has sucked up what employers otherwise could have devoted to increased wages for the middle class.)
Causing some citizens to skip necessary, or preventative medical care, resulting in patient harm and larger medical bills down the road.

As healthcare spending consumes an ever increasing portion of the federal budget, the very principle of our representative democracy is at risk. How can our elected officials make decisions regarding allocating resources if nearly all of those resources have already been committed by previous administrations? George Will recently noted: “Most alarming is American democracy becoming a gerontocracy. The Steuerle-Roeper Fiscal Democracy Index measures how much of the allocation of government revenues is determined by current democratic processes and how much by prior decisions establishing permanent programs running on autopilot. The portion of the federal budget automatically spent by choices made years ago is approaching 90 percent.”

Lots of unnecessary, potentially harmful, and wasteful care is happening, and it is fostered by the fee-for-service system.

The Institute of Medicine suggests that 30% of healthcare spending is avoidable. Unnecessary care is not just wasteful, it actually hurts people. More than one speaker noted that if you want affordable care, “here’s an idea… Stop wasting 30 to 40 cents of every dollar we spend.”

The drivers of medical waste (unnecessary, and potentially harmful care) in the fee-for-service world include:

A fragmented, uncoordinated delivery system.
Misaligned incentives between patients, physicians, payers and society (which create artificial demand for unnecessary care).
Lack of routine access to clinical decision support.
Imperfect knowledge, both on the part of physicians and patients.
Unconscious and conscious bias to provide unnecessary care.
Lack of price and quality transparency, to both physicians and patients.
Under-investment as a society in the social determinants of health.
Poor transitions of care from one setting of care to another.
Unnecessary administrative burden, usually driven by insurers and government.
Defensive medicine, in an effort to ward off medical malpractice lawsuits. (One study suggests the US wastes 200 billion dollars each year on wasteful and unnecessay medical testing alone.)
Aggressive, unnecessary, and often harmful end-of-life care.
A failed behavioral health system.
Self-enriching self-referral. (This only exists in the fee-for-service world.)
Direct to consumer marketing of pharmaceuticals.
Inappropriate utilization by patients due to our third party payment system.
Medical errors.
A medical arms race of unnecessary, underutilized, and overpriced shiny new toys; surgical robots, proton beam machines, cyclotrons and high end imaging machines often bought to, “keep up with the Jones.”
Pharmaceutical price escalation. (If the pharmaceutical industry wants to price their miracle drugs at $475,000.00 per patient, as if they were a monopoly, then they should be regulated like a monopoly utility, but that’s a post for another day.)

How can we get to affordability? By eliminating wasteful healthcare spending.

Dr. Glenn Steele, Geisinger’s former president notes, “Our core belief is that about 40% of what doctors and hospitals do is wasteful. If you can extract that percentage of crap, you can redistribute it into savings and profits but also into procedures that actually help patients.”

Under the fee-for-service system, we won’t pay for a patient to call their doctor to ask if something is a true emergency, yet insurers will pay for their ambulance ride to the ER and for an unnecessary ER visit. Our current incentives are misaligned and incent unnecessary care. Fee-for-service is the enemy of population health.

Path to the future:

We won’t solve this problem by tinkering around the edges. We need an all-in, bold, new approach to healthcare reimbursement which rewards improving the health of the population. Today’s well-intentioned but hopelessly misaligned population health strategies and alternative payment models are built on the chassis of specialist fee-for-service payments. It’s specialists who drive most of the healthcare spending within the US. No physician’s salary should be volume driven. In a future post, I will explore what I call Accountable Specialist Care; a healthcare payment reform which can be embraced by specialists and has the potential to dramatically reduce wasteful healthcare spending.

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