Latest Drugwonks' Blog
Premiums -- which are largely tax free -- have been increasing. But increasingly, Americans are paying LESS out of pocket for health care now than at anytime in recent history.
Sara Kliff at the Washington Post ran the numbers and provides some good infographics that show this is the case:
http://www.washingtonpost.com/blogs/wonkblog/files/2013/02/pm-gr-healthcare_howwepay-617.gif
Meanwhile, in many European health systems out of pocket spending has increased. But per capita health care spending in several OECD countries is increasing FASTER than it has in the US.
It's hard to establish a direct cause and effect but are many indications that it is the decline in death rates, morbidity and rise in life expectancy that explains the slowdown. And in turn, the evidence that medical innovation -- a leading source of these health changes -- is responsible for much of the decline is stronger than it is for the traditional conservative claim that it's because of greater consumer control of dollars.
Here's a thought experiment that underscores my claim:
Take any major disease and it's death rate and ask yourself what would make more difference in reducing the rate of health care spending over the past 30 years: health savings accounts or medical innovations that reduced death, disability and the reliance on expensive after the fact care such as hospitals and doctors. Would HSAs make any difference if we were still treating HIV, cancer, heart disease with technologies available 30 years ago?
Let's look at Medicare specifically. Conservatives love to point out that Medicare Part D came in under budget because they think it advances the case for consumer directed healthcare. In fact, one reason Part D came in under budget estimates is because millions of seniors don't sign up for it. Does that mean they are spending less on new medicines? Not at all. Lots of seniors still get medicines paid for through retiree plans and Medicare supplemental plans. And the shift to generic medicines which Part D likely accelerated has not been associated with large increases in utilization. What is more likely at play here is the introduction, since 2003, of treatments leading to better outcomes and well-being especially for people living with cancers, heart disease, stroke, diabetes, rheumatoid arthritis and even Alzheimer's. Generics are great but the greatest benefit comes from new medicines.
A paper by Victor Fuchs concluded that "the share of increases in life expectancy realized after age 65 was only about 20 percent at the beginning of the 20th century for the United States and 16 other countries at comparable stages of development; but that share was close to 80 percent by the dawn of the 21st century, and is almost certainly approaching 100 percent..."
These increases are twinned with gains in well-being, which of course translate into less consumption of the most expensive forms of medical care.
We have to rethink the role longevity and medical innovation plays in our economy and in health care spending in particular. They are not viruses that need to be contained or problems that need to be managed. And the key to future gains are not HSAs -- which I favor -- but the rapid development and adoption of medical innovations.
Most physicians feel that tablet computers are better suited for care delivery than smartphones, according to a new survey of nearly 1,400 doctors. That said, app usage found most favor on smartphones – and docs feel there's much room for improvement in clinical apps generally.
Two reports from AmericanEHR Partners – a joint project of the American College of Physicians and Cientis Technologies – find that the most common activity of physicians who use EHRs and also use a smartphone or tablet is "sending and receiving emails."
Quelle surprise!
A close second, according to the studies, "Mobile Usage in the Medical Space 2013" and "Tablet Usage by Physicians 2013," is accessing EHRs, with 51 percent of docs saying they do so daily.
Among physicians who have a EHR, 75 percent use a smartphone and 33 percent use a tablet (just 7 percent of physicians surveyed use their smartphone to access EHRs) – but time spent on tablets is 66 percent higher than time spent on smartphones.
However, clinical apps usage in medical practices was much higher among smartphone users (51 percent daily) than tablet users (30 percent daily).
But both tablet and smart phone apps need to be better.
Only 28 percent of smartphone users and 18 percent of tablet users said they were 'very satisfied' with the quality of apps for their profession.
It’s time for developers to learn what physicians want and how they want it delivered -- and then deliver on the promise.
“The overarching issue that brings us to the AVBCC Annual Conference is that rising healthcare costs are unsustainable,” said Jennifer Malin, MD, PhD, Medical Director of Oncology at WellPoint, Inc, who spoke at the Third Annual Conference of the Association for Value-Based Cancer Care from the perspective of managed markets.
“In 5 years, premiums and out-of-pocket costs for a family are projected to equal half the median household income,” she noted. “Our challenge is to come to terms with this and continue to innovate in ways that ensure patients have high-quality care.”
This is pure hyperbole designed to set up your straw man argument in favor of rationing access new cancer drugs and forcing patients to pay out of pocket for such breakthroughs including oral therapies.
We've heard the alarms about rising health care costs being unsustainable for decades. Here's a quote that may sound familar:
"If you put technology costs and wage costs together, the inflation rate will be 5 1/2 percent to 6 percent a year in real terms. Population growth will add to health care costs by 1 1/2 percent to 4 percent a year in excess of G.N.P.
With technology, even when something is cheaper we will be using it more. Wages are also increasing. This problem is dramatically illustrated by the shortages of nurses and lab technicians. Wages are going up, and we will have to pay people more to maintain the current level of quality. I am sceptical about anyone bringing down costs."
That was from the NY Times. It was written in 1988.
http://www.nytimes.com/1988/11/27/business/prospects-soaring-health-care-costs.html
There was also a president who summoned a joint session of Congress to talk about massive crisis in health care spending. That was Nixon in 1970.
In fact, over the past 20 years health care costs in the US have increased more slowly than they have in many Western countries
Further, out of pocket costs for families have actually declined in the past decade except for the sickest patients with cancer who are forced to pay half the cost of oral therapies by companies such as Wellpoint. Here's a WashPo article making just that point.
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/05/out-of-pocket-health-spending-is-shrinking-yes-really/
As for premiums, well, I am sure the fact that premiums increase faster than health care spending per capita is something Dr. Malin could explain. Rather, after raising false alarms and making inaccurate statements about the health care cost 'problem' she then pivots and seek to pin the blame on the cost of cancer drugs.
Here are the facts:
Spending on all cancer care has been about 5 percent of total health care spending each year for the past decade.
Cancer drugs are about 2 percent of total health care spending and about 23 percent of all outpatient drug spending. That's about what is spent on other chronic diseases. And by definition, most tumors are chronic conditions.
As for new cancer medicines introduced since 2000, they make up a little over 1 percent of all health care spending. In the meantime, I shouldn't have to remind you that their use corresponds with the faster decline in cancer death rates in history. Since 1990, the number of cancer survivors has doubled and the 48 million additional life years of cancer patients has generated nearly $4.7 trillion in income. If we didn't add a new medicine since 1990, it wouldn't save a dime. Indeed, unless health plans are in the business of euthanizing cancer patients, it would have to hospitalize individuals. Given that the average length of stay and the number of hospitalizations for cancer has declined since 1990, I estimate that treating people with tools introduced before then would cost us an additional $200 billion.
Which leads me to her claim that doctors are only 3 percent of spending on cancer care and that it reflects a problem. Hospitals and doctors are the biggest contributors to health care. A dollar of spending on new medicines, particularly cancer therapies, reduce spending on other services by about $7. Even the CBO, which is reluctant to claim that increasing spending on one service can save money, has said that new spending reduces health care costs. Which explains why as the Medicare prescription drug benefit was introduced, Medicare spending rates began to slow.
I won't challenge her claim about oncology treatments making up about 40 percent of the cost. Indeed, I see that as a sign that Wellpoint is doing right by patients. What bothers me most is the use of data on treating NSLC in 2006 as an example of how new treatments aren't really worth the money compared to old and more toxic treatments. Malin used average overall survival derived from randomized clinical trials. Is this how Wellpoint practices oncology?
I was at ASCO and met with researchers who are screening lung tumors using multiplexed assays for mutations in KRAS, EGFR, HER2, BRAF, PIK3CA, AKT1, MEK1, and NRAS and are using flourescence in situ hybridization (FISH) for ALK rearrangements and MET amplifications. The most common mutations found so far have been KRAS (23 percent) and EGFR (17 percent). At a time when all cancer patients, including NSLC, are defined by their driver mutations, Wellpoint's use of one size fits all data to justify outdated clinical pathways is very troubling.
I'd be interested in knowing if Wellpoint requires cancer patients to 'fail first' on cheaper cancer drugs (which are in short supply) without regard or use of genotyping and tumor profiling. Also, does Wellpoint pay for new and off-label indications for cancer based on such such genetic analysis or does it require randomized clinical trials before paying for targeted treatment?
Indeed, in another article Dr. Malin is quoted as saying: " In colon cancer, for example, the costs of care are $80,000 with cetuximab (Erbitux) and $91,000 with bevacizumab (Avastin) for less than a 2-month improvement in survival. “We are questioning whether the costs associated with this relatively modest improvement in survival is worth it,” Dr Malin said.
Setting the cherry picking of overall survival data , where is the discussion of using a combination of BRAF and EFGR inhibitors in patients with a BRAF mutation? Doing randomized studies on patients without regard to mutations is immoral. So is treating cancer without regard to these variations.
Where does that put talking points that seek to blame the 2 percent of health care dollars we spend on new cancer medicines for an explosion in health care spending and out of pocket costs that does not exist?
Too often medical innovation against cancer has been both undervalued and even identified as a problem to be eradicated. That's one reason changes necessary to truly accelerate progress have preserved the status quo
Most people don't know that since 1990 new cancer therapies generated 43 million additional life years for people living with cancer. Those additional life years created $4.7 trillion in economic value. Every dollar we spend on new cancer medicines reduce spending on hospitals and doctors by 7 dollars. Such innovative treatments are less than two percent of total health care spending. They are the leading source of longer life, lower health care costs and greater economic growth.
Personalized therapies are the leading edge of this progress. Unfortunately it takes longer than ever for new medicines to get FDA approval. Health plans are requiring people to pay more and wait longer for innovations that save lives and reduce what consumers and they spend of health care. The reboot will be the result of patients, doctors and researcher knowing and sharing their genomic information about cancers using online apps and social networks. These virtual cure communities will define what treatments and mutations to study and use.
The American inventor Buckminster Fuller said: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”
We hope to demonstrate that the existing approach to medical innovation, while serving us well, is outdated and to support the building of new model that can lead to a world free from cancer.
The big news is the Supreme verdict that human genes cannot be patented.
And it was unanimous.
Is the decision good for patients – and what that does that mean? Does it mean prices (now driven by competition) will decrease? Does it mean that tests (being developed by multiple companies) will become more accurate? Does it mean payers will see the light?
Will “open genes” help or hinder innovation? Well, on the one hand, more companies (at least in theory) will be able to develop new products. But will lower profit margins, without patentable genes, be attractive to investors? Will competition drive tests that are “better” (more accurate, faster, etc.)? Or will it result in “me-too” tests at parity pricing. (Think “statins.”)
Will it increase patient access? Just as with generic drugs, competition will drive down costs. But by how much? Competition isn’t likely to result in plummeting prices. After all, process patents are still vey much alive.
Perhaps the most relevant question is whether or not the Court’s decision will in some way influence how payers view such tests. And then there's the issue of how they are regulated.
And, speaking of ever-greening -- there’s the interesting question of plant-derived medicines. Are natural compounds next?
This is not the end of the discussion. Nor is it the beginning of the end. It is, however, the end of the beginning.
Dr. Jerry Avorn (in his one-sided and self-congratulatory New York Times op-ed) misses a crucial piece of the argument on academic detailing – fairness.
Government detailing programs aren’t neutral. Just like detailing programs run by pharmaceutical companies, there is an inherent "interest."
According to the Agency for Health Research and Quality (AHRQ) the government’s top priority is ‘‘high volume’’ practices across 150 Metropolitan Statistical Areas. So, rather than focusing on offices with disproportionately high negative patient outcomes, the government is directing its efforts against those doctors who are high prescribers—which is a pretty good indicator about what government detailing is all about—decreasing cost rather than improving care.
When AHRQ’s ‘‘outreach experts’’ phone physicians to request appointments, they are allowed to entice physicians with the promise of free Continuing Medical Education (CME) credits. Would a pharmaceutical company be permitted to offer such an enticement? No.
Government-funded detailers must be held to the same high standards as industry representatives. This simple step would ensure providers are receiving accurate, unbiased information on the best treatment options available to improve patient care. When it comes to academic detailing, fairness is the proper yardstick. The general lack of rules or oversight stands in stark contrast to the extreme scrutiny with which industry “detailers” are subject in their interactions with physicians.
In Utah, the recently passed Information on Pharmaceutical Products Act makes the common sense point that without public scrutiny there is no guarantee that government-sponsored detailing will present information that is unbiased, peer-reviewed, and aligned with the existing evidence base. Bravo. Without clear guidelines, there is nothing to prevent government detailers from using their outreach to advocate for lower costs instead of educating for better care.
Per the new Health Affairs study on Consumer Directed Health Plans (CDHPs), here is the article.
As to the study design – there is no discussion of outcomes. As to the reason – is it unfair to say that the benefit model is being pushed for short-term economic benefit to … employers and payers?
Just sayin’.
For more on this, see The Cost/Quality Conundrum.
The study found that members in one large employer’s health plan filled significantly fewer prescriptions following a transition from a preferred-provider organization PPO plan to a consumer-directed health plan. The study followed more than 13,000 individuals for five years.
The article cites a Towers Watson employer survey finding that the percentage of employers offering only CDHPs to employees increased from 5% in 2007 to 8% in 2012 and is expected to rise to 13% in 2013.
Enhanced quality? Better outcomes? No, lower cost.
Regulations pertaining to the tax treatment of health reimbursement arrangements and HSAs as well as ACA’s excise tax on high-cost health plans that takes effect in 2018 “make CDHPs more attractive to employers because they may keep costs below the threshold that triggers the tax.”
Outpatient physician visits showed a significant decline and emergency department (ED) visits showed a significant increase for the study group over the four years following the switch to a CDHP. “When it comes to the initial decline in prescription drug use, this may be the result of fewer outpatient office visits or simply the introduction of the CDHP,” the article says. “However, it is unknown whether people only reduced unnecessary prescriptions or reduced the use of necessary pharmaceutical services. If the latter occurred, it may explain the longer-term increase in ED use.”
“The increase in ED use might stem from the long-term implications of reductions in physician office visits and prescription drug use after the CDHP was implemented. Fewer physician office visits may lead to the writing of fewer prescriptions, which could in turn mean that individuals with chronic conditions are less adherent to recommended medication therapy,” the article says. However, the article adds that more study is needed to determine the cause for the increase in ED visits.
It will be interesting to analyze the paper to see the intricacies of the benefit structure and whether that played a role in the drops in outpatient office visits and RX use and increased ED visits.
The FDA's Endocrinologic and Metabolic Drugs and Drug Safety and Risk Management Advisory Committees voted 20 of 26 to recommend removing or modifying rosiglitazone's highly restrictive label and distribution system. Five voted to keep the product's risk evaluation and mitigation strategy (REMS) as it is now.
"I find no substantial evidence or information that rosiglitazone is unsafe," Arthur Moss, MD, cardiology professor at the University of Rochester School of Medicine in New York, said, adding its ability to lower blood sugar without causing hypoglycemia proves it could be of use.
Sanjay Kaul, MD, director of cardiovascular fellowship training at Cedars-Sinai Medical Center in Los Angeles, said there's not enough evidence to support or blame rosiglitazone's safety and therefore physicians should be able to choose it if they desire.
Why is this important so far after the fact?
First of all, it’s important because cardiologists need to have faith in the products that they have in their armamentarium.
Second it’s important to set the record/RECORD straight. After the 2010 media circus, the Congressional carnival, and the endless posturing from the Cleveland metropolitan area – yesterday’s adcomm vindicated both the process and the people at the FDA. In 2010 the pressure was withering. In 2013 there was a degree of redemption.
(As Mark Twain quipped, “The rule is perfect: in all matters of opinion our adversaries are insane.”)
Thirdly, the adcomm discussion and vote is important relative to the FDA’s evolving views on the future development and review of diabetes medicines.
Let me embrace thee, sour adversity, for wise men say it is the wisest course.
-- William Shakespeare
A Portland, Maine, physician announced on April 1 that he would cut the middle man and deal directly with his patients, no longer accepting insurance in any form.
"I’ve been able to cut my prices in half because my overhead will be so much less," Dr. Michael Ciampi told the Bangor Daily News. Before, Ciampi charged an existing patient $160 for an office visit addressing one or more complicated health problems. Now, he charges $75.
Ciampi lost a few hundred of his 2,000 patients who had insurance and didn't want to deal with the hassle of paperwork for reimbursement, but he expects to make up the loss by attracting the self-employed, the young and others without insurance or with prohibitively high deductibles.
Read more.
Anna Gorman of the L.A. Times on the drive to enroll young Americans on insurance plans:
Arsine Sargsyan is 23 years old, healthy and uninsured. She chooses to forgo coverage for one simple reason: "I never get sick."
Despite her reluctance, Sargsyan is exactly the type of person insurance plans, states and the federal government are counting on to make health reform work.
As the clock ticks toward the 2014 launch of the Affordable Care Act, health leaders across the nation are embarking on a tough task: persuading young adults like Sargsyan to enroll. Their participation will be critical to balance out older, sicker patients more likely to sign up for health insurance as soon as they are able.
Read more.
Tom Miller of the American Enterprise Institute on the ACA’s health flexible spending account provisions negative impact on older Americans:
The central provisions of the Affordable Care Act require younger and healthier Americans to buy insurance policies that will, in essence, subsidize the healthcare of older and sicker Americans. But one of Obamacare's hidden taxes — a new limit on contributions to health flexible spending accounts, or FSAs — will hit older and chronically ill individuals hardest.
Starting this year, the healthcare law imposes a $2,500 annual cap on an individual's contribution to an FSA that is part of an employer's "cafeteria" benefits plan. Such contributions, diverted directly from one's paycheck, are not subject to federal income and payroll taxes. The money in an FSA can then be used to pay for qualified medical expenses such as deductibles, co-insurance and co-payments, as well as services not covered by insurance.
Read more.
Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.
