Category Archives: Health Economics

“Why Health Care Tech is Still So Bad” -NY Times

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Here’s the link on this thoughtful article: “Why Health Care Tech is Still So Bad”

This article highlights the problems including physicians distracted from patients due to data entry, problems with workflow, and alert fatigue. The author argues that we need to keep working on electronic health records; “the digitization of health care promises, eventually, to be transformative.”

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Marketing to Doctors -Informative Satire

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One of my colleagues recently shared a youtube link that I recommend highly to anyone who is concerned about the relationship between pharmaceutical companies and physicians.  As with any good piece of satire, it is both funny and thought-provoking.  As one would question the impartiality of politicians who receive funds from constituents with a specific agenda, likewise patients may question whether physicians are unduly influenced by their relationship with pharmaceutical companies.

For those too busy to enjoy the entire ~17 minutes, watch the last three minutes:

 

Implementing High-Value Care

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A recent commentary (NEJM 2014; 371: 2145-47) describes some early successes and failures with efforts at “getting more performance from performance measurement.”

The authors note that “the current measurement paradigm..does not live up to its potential.”  There have been a proliferation of measurements “without commensurate results.”

Areas of progress:

Reducing hospital readmissions: “national readmission rates, which hovered around 19% between 2007 and 2011, had dropped to approximately 17.5% by 2013…recent research suggests that the measured decrease resulted from actual changes in care and not simply greater use of observation units or emergency department care.”

Rates of early elective deliveries: “the rate of early elective deliveries had stayed fixed for many years, even though there was evidence that the practice led to a greater need for neonatal intensive care, higher risks of maternal and neonatal complications, and health problems later in the children’s lives…the rates of early deliveries fell from 17% in 2010 to 4.6% in 2013 (www.leapfroggroup.org/tooearlydeliveries)”  This change happened due metrics in pay-for-performance or not paying for such deliveries along with educational efforts.

Areas Were Not Helpful (aka The Road Paved with Good Intentions)

“Unfortunately, for every instance in which performance initiatives improved care, there were cases …[that] simply enraged colleagues or inspired expenditures that produced no care improvements.”

Early Antibiotics for Community-Acquired Pneumonia:  Due to data suggesting that antibiotics within 6 hours of presentation positively influenced the outcome of community-acquired pneumonia (i.e. lower in-hospital mortality), this became a Centers for Medicare and Medicaid Services (CMS) metric.  “The measure led to inappropriate antibiotic use in patients without community-acquired pneumonia, had adverse consequences such as Clostridium difficile colitis, and did not reduce mortality.”

Bottomline: More work is needed to avoid needless busy work and improve patient outcomes.

As quoted in a previous blog entry:

“Not everything that counts can be counted, and not everything that can be counted counts.” –Albert Einstein

Cornering the Generic Markup

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Older generic drugs are not always a bargain these days.  A recent editorial (NEJM 2014; 371: 1859-62) highlights how some of these drugs have seen dramatic increases in prices.

  • Albendazole, an antiparasitic drug, used to cost $5.92 per daily dose. Now $119.58 per daily dose.  The total Medicaid costs for albendazole have increased from less than $100,00 per year in 2008 to more than $7.5 million in 2013.
  • Captopril, a blood pressure medication, increased from 1.4 cents per pill in 2012 to 39.9 cents per pill one year later.
  • Doxycycline, a commonly-used antibiotic, increased from 6.3 cents per pill to $3.36 per pill.

What’s driving these changes?  While these medications are not protected by patents or market exclusivity, some pharmaceutical companies attempt to corner a market and then unilaterally raise the prices.

Bottomline: Businesses that exert near monopolies don’t have to offer any “Black Friday” specials.

Malpractice Reform, Defensive Medicine, and Real World Costs

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A recent study (NEJM 2014; 371: 1518-25) showed that tort reform has little effect on medical costs, imaging rates, or admission by emergency room physicians.

One frequently heard argument in controlling medical costs is that fear of malpractice lawsuits drive physicians to order unnecessary care (“defensive medicine”); as such, if tort reform is broadly enacted this would presumably be an “easy” way to lower medical costs. To examine this issue more closely, the authors examined three states which changed the malpractice standard for emergency care from “ordinary negligence” to “gross negligence.”

  • Texas (in 2003)
  • Georgia (in 2005)
  • South Carolina (in 2005)

Using a 5% random sample of Medicare fee-for-service beneficiaries, the authors examined all ER visits to hospitals in the three reform states along with neighboring (control) states from 1997-2011 (total of 9 states examined).

Key finding: “We found no reduction in the rates of CT or MRI utilization or hospital admission in any of the three reform states and no reduction in charges in Texas or South Carolina.  In Georgia, reform was associated with a 3.6% reduction (95% confidence interval, 0.9 to 6.2%).”

While these reforms caused little changes in practice intensity and charges, the authors note that the Texas reforms, which affected other specialties as well, were associated with a 60% overall reduction in malpractice claims and 70% reduction in malpractice payments.

While the goal of tort reform may have been driven by costs, there could be other potential effects:

  • Physician job satisfaction
  • Improved physician regional supply
  • Reduction in claims
  • Less compensation for injured patients

Overall, the “effect of malpractice reform on the quality of care has been mixed.”

Take-away points (from authors)

  • “Physicians are less motivated by legal risk than they believe themselves to be”
  • “When legal risk decreases, the ‘path of least resistance’ may still favor resource-intensive care.”
  • “Malpractice reform may have less effect on costs than has been projected.”

Related blog post: 200 years of Health Law | gutsandgrowth

 

 

 

Deriving Measures of High Value Pediatric Care

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A recent article titled, “How does a gastroenterologist demonstrate value?” (linked to full text) DOI: http://dx.doi.org/10.1016/j.cgh.2014.08.021 provides some insight into what is in store for gastroenterologists as the shift from fee-for-service is influenced by value care initiatives.

Key points:

  • Value = Outcome/Cost
  • Healthcare value = Health of population/Cost
  • “AGA has spent the last 7 years developing measures that focus on outcomes and population management. They are available at http://www.gastro.org/practice/quality-initiatives/performance-measures.”This website provides several measures for hepatitis C, inflammatory bowel disease, endoscopy, and others.
  • For example, endoscopy measures:Measure # 1: Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk PatientsMeasure #2: Surveillance Colonoscopy Interval for Patients with a History of Colonic Polyps- Avoidance of Inappropriate UseMeasure # 3: Comprehensive Colonoscopy Documentation

As a pediatric gastroenterologist, it is clear that more efforts will be needed for the pediatric population.  While the authors note that “financial pressures will intensify over time,” at the current time there is extremely wide variation on the use of common procedures; in fact, physicians are typically incentivized to perform procedures even in the setting of low yield.  So the first steps will be to define a high value pediatric GI practice.

Another reference with regard to value care (J Pediatr 2014; 165: 650-51) discusses how infectious disease consultations improve outcomes, can decrease costs (length of stay, complications) and improve usage of appropriate antimicrobials.  Another helpful point: “Although common, curbside consultations have been shown to be associated with inferior patient outcomes compared with official bedside consultations.”  This is often due to incomplete or inaccurate data.

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Do You Really Need Both a CRP and ESR?

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An erythrocyte sedimentation rate (ESR) and a C-reactive protein (CRP) are often ordered together, but many times provide similar information.  An ESR is a measure of acute phase proteins in the plasma.  A CRP is a proinflammatory acute phase reactant “which responds to infection and trauma by activating the complement/phagocytosis components of the immune system.”

Inevitably with the two tests, there is a higher sensitivity; for example, with osteomyelitis, one study found the paired testing had a 98% sensitivity compared with a 95% sensitivity for CRP alone (not statistically significant).  However, the authors note that “concordant or discordant results also have been found to lack clinical utility.”  As a consequence, the authors decided to investigate the costs of pairing these tests.  At their 739 tertiary care hospital, the additional cost resulted in charges between $250,000-400,000 more than ordering a single test.  They extrapolate the cost to $300 million nationally.

Take-home message: If you were spending your own money &/or trying to be a good steward of someone else’s, could you justify the expense of routinely obtaining both an ESR and a CRP?

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What physicians can learn from fast-food restaurants and …

My First Take: It is Hard to Save $$$ at a Rolls-Royce Dealership

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A recent article looked at a crucial issue –trying to deliver “best care at lower cost” (Inflamm Bowel Dis 2014; 20: 946-51).  “The goal of this report is to answer the primary question: What are implementable strategies and exploratory considerations for cost-efficient anti-TNF use while maintaining the highest quality of IBD care?”

The strategies that are discussed include the following:

  • Reduce costs of avoidable dose intensification of class switching by eliminating episodic anti-TNF use and improving patient education
  • Reduce over-utilization costs by accurately determining indication for escalating anti-TNF use
  • Reduce nondrug infliximab costs through shortened infusion times after initial safety is clearly established

Exploratory considerations:

  • Self-injectable anti-TNFs
  • Combination therapy
  • Monitoring anti-TNF drug levels and autoantibodies
  • Assessing mucosal healing as a clinical endpoint

The authors discuss both the exploratory issues and the strategies.  Some of each could easily increase costs, at least in the short-term, rather than reduce them.  The authors also make note of the development of an infliximab biosimilar (Inflecta) which could be approved in U.S. by 2015.

While the review article is a good read, in my opinion the authors fail to address in a meaningful way the larger context.  The costs for hospital-based care are enormous; pediatric hospitals are like Rolls-Royce dealerships; and by the way, if you have to ask how much it costs, you probably cannot afford it.  With regard to charges/costs, there is little transparency, high variability, and little accountability.  Understanding health care costs and trying to get a good deal is much harder than buying a car.

For IBD care, as an example, the authors make note of the cost of infliximab at one pediatric tertiary care center.  At this institution, “77% of the total health care cost for each infusion encounter” was for non-drug costs.  Given how expensive the drug cost is, the expense for an infusion is very high, but probably similar to many other pediatric hospitals.

If one is interested in reducing the costs of infliximab and other infusions, the first practical step would be to consider infusion outside of a hospital-based setting, such as an infusion center.  In such a setting, the patient safety would still be excellent but the costs would be less.

In Atlanta, there have been some high-profile hospital acquisitions that have increased health care costs (When doctors sell out, hospitals cash in | www.myajc.com).  In many circumstances, when a hospital acquires a physician practice, infusion center, or endoscopy center, the charges and reimbursement increase despite no change in clinical care.  In this way and many others, the current system promotes cost-inefficient care.

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Considering Cost in Treatment Choices

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A recent article indicates a growing trend in medicine –considering the cost of therapy not just the effectiveness.  Physicians, by and large, view the patient sitting in front of them as their top priority, not “bedside rationing.”  On the other hand, policy makers often avoid engaging in cost issues and argue that physicians are best-suited to make decisions for their patients.

Here’s an excerpt:

Some doctors see a potential conflict in trying to be both providers of patient care and financial overseers.

“There should be forces in society who should be concerned about the budget, about how many M.R.I.s we do, but they shouldn’t be functioning simultaneously as doctors,” said Dr. Martin A. Samuels, the chairman of the neurology department at Brigham and Women’s Hospital in Boston. He said doctors risked losing the trust of patients if they told patients, “I’m not going to do what I think is best for you because I think it’s bad for the health care budget in Massachusetts.”

Doctors can face some stark trade-offs. Studies have shown, for example, that two drugs are about equally effective in treating an eye disease, macular degeneration. But one costs $50 a dose and the other close to $2,000. Medicare could save hundreds of millions of dollars a year if everyone used the cheaper drug, Avastin, instead of the costlier one, Lucentis.

But the Food and Drug Administration has not approved Avastin for use in the eye, and using it rather than the alternative, Lucentis, might carry an additional, albeit slight, safety risk. Should doctors consider Medicare’s budget in deciding what to use?

…Generally, Medicare is not supposed to consider cost effectiveness in coverage decisions, and other government attempts to do so are susceptible to criticism as rationing. Insurers do perform cost analyses, but they also risk ire from patients and doctors…

Also, in recent years, as part of a campaign called Choosing Wisely, many medical societies have submitted lists of the top five procedures, tests or products to be questioned because they are considered wasteful…

Dr. Steven D. Pearson, a visiting scientist in the ethics department at the National Institutes of Health, said the move by some societies to incorporate economic analysis “heralds an important shift in the way doctors in America are talking about cost and value.”

He said that having societies do such evaluations was better than having a doctor make such trade-offs while treating an individual patient, which is sometimes called bedside rationing…

Related blog post: Do you know about the “Choosing Wisely Campaign …

PCORI: Spending Money to Save Money

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I hadn’t heard much about PCORI (Patient-Centered Outcomes Research Institute) until I learned about two large awards given to ImproveCareNow (ImproveCareNow | LOOP).  (This blog has previously discussed ImproveCareNow -see links below.)

Now a perspective article provides a lot more detail regarding PCORI (NEJM 2014; 370: 592-94) including the fact that it will commit as much as $1.5 billion over the next 3 years to research projects.  While this is impressive, on a side note, PCORI could benefit from a better name.  In England, a similar organization is called NICE (National Institute for Health and Care Excellence).  Of course, NICE may be more about promoting evidence-based medicine than funding clinical effectiveness research (CER) like PCORI.

A full list of funded projects is available at http://www.pcori.org/pfaawards/?viewby=priority.  From this website: “The Patient-Centered Outcomes Research Institute (PCORI) was created to fund research that will provide patients and those who care for them with the evidence-based information needed to make better-informed health and healthcare decisions. We do this by supporting studies that seek to answer questions important to patients and meaningfully involve patients and others across the healthcare community at all stages of the research process.”

According to the perspective article, PCORI has funded 162 CER studies, “37 (23%) focus on cancer detection, treatment or surveillance; 30 (19%) on mental health; 26 (16%) on cardiovascular diseases; and 18 (11%) on endocrine disorders, including diabetes mellitus.”

Bottomline: Though I would appreciate a better name, PCORI clinical effectiveness research projects are going to shape many important healthcare decisions.

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