February 04, 2016
This week the Patient-Centered Primary Care Collaborative (PCPCC) unveiled its fifth annual report on the patient centered medical home’s (PCMH) impact on cost and quality. In the quest to improve population health and reduce cost, PCPCC has collected data from peer-reviewed studies on medical homes’ costs and utilization. Several Healthcare Leadership Council (HLC) members – Anthem, Aetna, Johnson & Johnson, McKesson, Merck, Premier and Takeda — are executive members of PCPCC. The results are instructive in the continuing discussion on how to elevate healthcare quality while containing overall spending. Key takeaways from the report include:
- A focus on primary care drives down cost and utilization
- Best results came from sites that used multiple payers
- It is essential to align payment with performance
The panel that discussed the findings included Marci Nielsen, CEO of PCPCC, Alissa Fox, SVP of the Office of Policy and Representation at Blue Cross Blue Shield Association, Chris Koller, President of Milbank Memorial Fund, and Len Nichols, Director of the Center for Health Policy Research and Ethics at George Mason University.
The experts stated that PCMH’s have demonstrated the ability to control costs by providing the right care. Delivery reform and payment reform go hand in hand; one will not succeed without the other. As the nation works toward a value-based healthcare system it is important to be mindful of the cost of transformation. Incentives must be right, there will be a need for antitrust exemptions, and the industry will rely on national standards but local relationships. Currently, fee-for-service does not reimburse services that are key to coordinating patient care. The PCMH model is not one size fits all, according to the panel, and more research is needed to identify which varying components are demonstrating the most value. Defining measures and identifying best practices are necessary steps in ensuring successful implementation of the PCMH model.
This discussion on how to improve value within the healthcare system will reach an important juncture later this month when the Healthcare Leadership Council unveils specific policy recommendations – endorsed by virtually all sectors of the healthcare industry in addition to patient advocacy organizations – on how to remove barriers to quality-enhancing, cost-saving health innovations. Watch this space for more information.
December 18, 2015
In the movie Wall Street, the amoral corporate takeover specialist Gordon Gekko is intent on taking over the fictional airline company BlueStar so he can break it up into pieces to sell off for a hefty profit. In a technical sense, he would become an airline CEO, even if he didn’t know a fuselage from a tail fin.
Martin Shkreli is a real-life Gordon Gekko. Just arrested this week on securities fraud charges, Shkreli, the 32-year-old co-founder of the MSMB Capital Management hedge fund, has been a fixture in the news over the last several months because of his purchase of Turing Pharmaceuticals and the subsequent decision to raise the price of a decades-old anti-parasite drug from $13.50 a pill to $750.
Headlines about Shkreli’s arrest refer to him as a “pharmaceutical company CEO.” In the strictest sense, that’s true. In reality, he bears no resemblance to the leaders of the nation’s research-based pharmaceutical companies who invest billions of dollars in the development of new cures and improved treatments. It’s a gross inaccuracy to paint the entire biopharmaceutical industry with the stain of Shkreli’s profiteering example.
Some are doing exactly that, though, and using the Turing episode as a catalyst to call for greater government price controls on prescription medications. Here’s an example just this week from the Vox website:
“The story of Martin Shkreli and Daraprim’s giant price increase is, more fundamentally, a story about America’s unique drug pricing policies. We are the only developed nation that lets drugmakers set their own prices — maximizing profits the same way that sellers of chairs, mugs, shoes, or any other seller of manufactured goods would. In Europe, Canada, and Australia, governments view the market for cures as essentially uncompetitive and set the price as part of a bureaucratic process — similar to how electricity or water are priced in regulated US utility markets.”
The analogy is, of course, severely flawed. The supply of electricity and water is not contingent upon innovation in the same way that new medicines must be developed and constantly improved to combat cancer, heart disease, diabetes and Alzheimer’s, to name just a few chronic illnesses that affect tens of millions of us. It’s notable that the calls for bureaucratic price controls, using Shkreli as the poster boy for egregious corporate greed, seldom mention the inevitable tradeoffs in the form of fewer resources for medical research.
Yes, the cost and accessibility of medications is a concern and one that should be addressed, but not with so-called solutions that make society choose between greater affordability today versus better health outcomes in the foreseeable future. As we’ve seen with the price drop on the Hepatitis C cure once other companies developed their own medications to compete with Gilead Pharmaceutical’s Sovaldi, the market is often self-adjusting when it comes to price. There are other ideas that warrant discussion, such as regulatory reforms to reduce the extraordinary cost and expense involved in moving a new drug from laboratory to patient.
The point is, it makes no more sense to let an outlier like Martin Shkreli drive pharmaceutical pricing policy any more than it would to arrest every financial services executive because Michael Douglas was so believable as Gordon Gekko.
December 11, 2015
This week the Blue Cross Blue Shield Association, representing plans that serve over four million individuals in Medicare Advantage and Medicare Part D prescription drug plans, hosted a congressional briefing to discuss innovations in Medicare Advantage. Experts shared abundant evidence that Medicare Advantage plans have risen above and beyond traditional Medicare in providing quality healthcare that is cost-effective.
Several case studies were presented that highlighted continuing improvements being made to improve senior health:
- Care at Home, a service launched by BCBS of Western New York and Landmark Health, offers a team that does not replace the primary care physician, but rather collaborates with the doctors and stays apprised on how patients are faring in their own residences. Care at Home has enrolled 2,500 seniors since November 2014. Patients with multiple chronic diseases generate more than seven times the healthcare costs of patients with only one chronic disease. Medicare Advantage members who have six or more chronic diseases are eligible for Care at Home. The coordinated care, which includes nurturing and education family caregivers, has, thus far, helped prevent 617 emergency room visits.
- CareMore Health System, an Anthem company, uses doctors called extensivists to coordinate care for patients with chronic conditions. They also ensure that there is proper follow up with patients and that protocols are adhered to by all involved in the patients’ care. Predictive modeling is utilized to determine risk and practice early intervention, helping to keep costs low. An average day at CareMore includes visits to homes for social and behavioral support, reading results from monitors in patients’ homes, following up after discharge, and providing rides for patients who have no form of transportation to reach points of care.
- BCBS of Rhode Island identified pharmaceutical management as a way to lower healthcare costs and improve health outcomes. The patient- centered pharmacy program serves members with multiple chronic conditions who take at least four medications and spend over $3,000 on drugs. The medication therapy management includes comprehensive medication reviews, prescriber consultations, counseling for adherence and education, and monitoring to ensure good adherence habits are established. In just the first three quarters of 2015, 8,632 members were served with an estimated savings of $2.8 million.
These are just a few examples demonstrating how innovation in Medicare Advantage has protected patients from high out-of-pocket costs, maintained quality care, and kept consumer satisfaction levels high. These individual successes, and the others like them, need to be kept in mind by policymakers when they debate future support for the Medicare Advantage program. The best practices and outcomes achieved by these pioneers in healthcare should be shared and encouraged so they can be replicated across the country.
October 05, 2015
There has been a lot of talk of late about the price of prescription drugs. Most of it, unfortunately, has come in the form of 30-second sound bites, largely driven by one hedge fund investor’s decision to significantly raise the price of a single product.
Determining the correct price for an innovative, life-changing product to achieve both consumer accessibility as well as a return on investment, which is vital to fund future research and development, is a complex topic that warrants a thoughtful discussion, not glib attack lines.
Credit, then, goes to the Washington Post for its lengthy question-and-answer article with Joseph Jimenez, the CEO of Novartis, one of the world’s leading pharmaceutical companies. In the interview, Jimenez made, I believe, several striking and instructive points. Among them:
On price versus value:
“When you look at the cost of development, it continues to go up and up and up. So when we price a drug, we price it based on the value it will bring into that marketplace, and also how its price compares to the other therapies currently on the market. There’s been a lot of discussion about drug pricing. What we have to do is we have to shift that conversation away from the price toward the value. Like, what exactly is the value of this drug that is going to result in a positive outcome? And is society willing to pay for that drug?”
On the ability to use genomics to reduce the overall cost of drugs to society:
“Technology has improved so much in drug development that we now can find genetic markers on patients to ensure that they will benefit from our drug, and we’ll know those patients who won’t benefit from the drug. For example, we just launched a new lung cancer drug that only works in about 3 percent of patients with lung cancer, because only 3 percent have this particular genetic mutation. So we’re able to go to the payers and say, “Yes, this is an expensive drug in absolute, when you think about one patient taking this drug, but you’re not going to waste one dollar on this drug, because we’re only giving it to 3 percent of this population and the impact on the budget is quite small.”
On the value of pharmaceutical collaboration with academia:
“Academic collaborations are very important for the pharmaceutical industry because we do not spend money on basic research, we spend money on applied research. When there’s basic biology that has to be understood, an academic institution is going to be much better at doing that than Novartis. If we partner with them, we can take that learning and we can turn it into a drug.”
I recommend you read the full interview, which can be found here. Mr. Jimenez’s thoughts provide a foundation for a reasonable discussion regarding medical innovation and patient access, the kind of conversation our society needs to have.
June 30, 2015
There is an excellent read in the Wall Street Journal today from Susan DeVore, the President and CEO of the Premier, Inc. alliance of 3,000 community hospitals throughout the country. (Ms. DeVore is also chairman of the Healthcare Leadership Council.)
In her WSJ piece, Ms. DeVore notes that, while other industries have made excellent use of evolving information technologies to improve customer service and strengthen cost-efficiency, healthcare has lagged behind. Improved data sharing is essential, she writes, “to ensure the right information about the right patient is available at the right time.” She is absolutely correct in her assertion that making this happen is a responsibility shared by the private sector and public officials.
The DeVore column is below:
SUSAN DEVORE: Imagine what Twitter would be like if you were only able to have and Tweet to one follower? Or if email only worked within the four walls of your organization? Technology has made information sharing seamless and almost limitless for most people and industries. But it hasn’t reached its full potential in health care.
In health care, technology is foundational to drive change and improve the quality and value of patient care. The problem is that important health-care data cannot flow freely among the various health-information-technology systems that hospitals and health systems use. This hinders the ability for providers to connect and easily exchange information across their organizations and with other health systems.
As health systems focus on accountable care and increasingly move toward alternative payment models, the need for interoperable data across all health-information technology systems becomes critical. The ability to seamlessly pull discrete data anytime, anywhere helps to ensure the right information about the right patient is available at the right time. But today, providers are challenged with having to double check data pulled from disparate devices to make sure the information matches, such as dosing and blood sugar levels. Not only is this a step back for efficiency, but it is another manual process that has the potential to create errors and patient-safety issues.
To truly leverage health-information technology’s full potential, diverse networks and systems in health care must be able to talk to each other. To do so, we should require the use of innovative technology solutions such as open application programming interfaces (APIs) and secure third-party applications that connect the data to enable the real-time exchange of information.
Designing and implementing health-information technology that promotes collaboration among all stakeholders would create a learning health system that focuses on improving health-care quality, efficiency, safety, affordability and access. Private-public partnerships on interoperability governance, standards, measures and system transparency are essential to make this work.
A few weeks ago I was watching as my grandchildren were playing with their parents’ smartphones. At their ages, they are only interested in the bells and whistles, but in their little hands were devices probably considered impossible 10 or 15 years ago. Through innovation, ingenuity and necessity, my hope is that the challenge of interoperability becomes an obsolete concern.