The Perils of Low Cost Medicine

Today’s Managing Health Care Costs Indicator is  128,000

I’ve often posted about “accretive innovation,” new medical technologies that cost a lot, and offer only a small portion of patients what is often only a tiny benefit.  I've talked less about the consequences of when prices are too low - which means we'll not obtain the potential societal benefits of a new drug. 

First, an example of accretive innovation.

In 2001, Xigris (human activated protein C, Lilly) was approved for use in severe sepsis based on a small study.   The drug was heavily marketed by Lilly – including hiring a PR firm and secretly funding an ethics task force which came up with guidelines that promoted Xigris use.  Subsequent studies showed that the drug was associated with a higher risk of brain bleeding and did not improve survival rates. The drug was withdrawn from the market last fall.  The result of all of this marketing is that a wildly expensive drug ($8000 per dose) gained high market acceptance; sales were $200 million per year. 

I’m reminded of the Xigris story by the New York Times last week, which reported that tranxemic acid, a dirt-cheap generic medication, could save up to 128,000 lives a year, 4000 of them in the US.

From the Times report:

For months, a simple generic drug has been saving lives on America’s battlefields by slowing the bleeding of even gravely wounded soldiers.

Even better, it is cheap. But its very inexpensiveness has slowed its entry into American emergency rooms, where it might save the lives of bleeding victims of car crashes, shootings and stabbings — up to 4,000 Americans a year, according to a recent study.

Because there is so little profit in it, the companies that make it do not champion it.   

This isn’t the first time we’re seeing the ugly side to drugs costing too little.  We have serious shortages of generic oncology medications and generic attention deficit disorder medications right now.  We need effective drug company marketing to bring pharmaceutical innovations to physicians – but disseminating knowledge about drugs is difficult if there is no one with a profit motive to do so.    

I was aghast at the FDA approval of brand name colchicine,  a drug that cost pennies, was well-accepted for gout and other indications, and which skyrocketed in price to over $5.    I felt rage when the Wall Street Journal reported that a pharmaceutical would charge $1500 for a previously-generic $20 progesterone injection to prevent premature deliveries.  But perhaps my anger is at least partially misdirected. 

It’s obvious that we can’t afford ridiculously high prices for drugs.  It's a bit less obvious but no less true that we need high enough prices for effective drugs that their makers will manufacture them and market them for appropriate use.

Read More

Professional News

Today’s Managing Health Care Costs Indicator is 2006

The American College of Physicians produced a white paper in 2006 stating that primary care medicine in the United States was facing a ‘grave threat of collapse.’  It’s estimated that there might be 35,000 to 44,000 too few primary care physicians in the US by 2025, and primary care physicians already feel that their workload is overwhelming.   Primary care is a foundation for health care reform, but it’s badly broken.

Here are two anecdotes that I’ve heard recently that demonstrate some of what’s wrong with primary care.   A colleague complained to me that her primary care physician threatened to “cut off” her supply of an asthma preventive medicine because she had not been in to the office for over 12 months.    At almost the same time I heard from a Medicare-age relative that she called her primary care physician for severe abdominal pain on a Friday morning, and was offered an appointment on the following Wednesday afternoon.

The first example –a physician was gumming up her schedule with a value-destroying appointment for a highly motivated patient who was herself controlling her own chronic disease.  She was likely doing this because in a fee-for-service world there is no compensation for calling in prescriptions – and no good mechanism to track health care maintenance unless patients physically visit the office.   In the second example,  a non-clinical worker was performing triage.  The patient felt unvalued, her needs were not met, and she is likely to need emergency-setting that could have been avoided.

I’m happy to report that I’ve started a new professional chapter -- I’ve joined One Medical Group (www.onemedical.com) as the Chief Medical Officer as of March 1. 

One Medical is the brainchild of Dr. Tom X. Lee, a founder of Epocrates, the mobile medical and pharmaceutical reference tool used extensively by physicians around the world.  One Medical offers same day appointments and longer appointments, and is committed to sharing information with patients electronically.   The practice has built its own dedicated medical record which better supports the needs of primary care clinicians and patients – and promotes efficiency and higher quality. Patients can book their own appointments – no need to go through triage by a nonclinician. 

One Medical has an iPhone app that patients with acute illnesses can use to determine whether they can avoid an office visit.  A young woman with symptoms of a urinary tract infection can answer the app’s questions, and if appropriate a virtual medical team nurse practitioner or physician assistant can call an antibiotic in without an office visit.    The management team has extensive retail experience, and has focused on how to “delight customers,” not merely meet the minimum requirements to participate in health plans.  The practice has an annual membership fee of under $200, and currently has offices in San Francisco, Washington DC and New York, and is growing in its existing geography and coming to new cities in the future.

One Medical was featured in the New York Times last year.

I’m excited about this new role, and the team of clinicians and non-clinicians which I’ve joined.  You’ll probably see me focusing on some additional primary care issues, and of course I welcome your comments and thoughts. The blog continues to represent my personal point of view. 

Thanks

Read More

Health Insurance Company Response to High Risk Patients

Today’s Managing Health Care Costs Indicator is 25%

Click image to enlarge. Source above

Today’s NY Times has an article focused on high risk patients – who in the under-65 population represent about 1% of patients, and 25% of all medical costs – over $100,000 per year. Full Report Here (Registration Required)

The concentration of the cost of care is an important observation – the bottom 50% of Americans represent about 3% of total medical costs – so interventions to lower the cost of care for these least expensive health plan members are bound to be unsuccessful. This is also why programs to convince Americans to go see the doctor raise costs.   (Good Op-Ed on this topic from Dartmouth University today, too).

The robust and publicly-available Medicare claims database has been studied extensively – but many of the conclusions from the over 65 population are not applicable to the younger cohort insured through employer-based plans

-       Medicare beneficiaries are highly likely to be readmitted to the hospital (almost 20% in 30 days). Readmission rates are much lower  in the non-Medicare population (5-8%) , and many of these readmissions are planned, like followup inpatient chemotherapy.

-       Medicare spends a quarter of its dollars on patients in the last 6 months of life.   Commercial plans actually spend a very small portion of their claims on end of life care, since death is much less common in this population

-       Medicare beneficiaries stay with that insurance plan for the remainder of their lives, while commercial health plans “churn” membership at a rate of 15% or more a year

Care management interventions should not assume that the commercial population is akin to the Medicare populations.

Health plans have hired platoons of nurses to do outbound calls to high-risk beneficiaries– and they charge employers large fees to perform this work.    However, most of the evidence of efficacy of this intervention is highly anecdotal. From Reed Abelson’s article:

When Wendy Meath, a 59-year-old with diabetes, was hospitalized a year ago, she was identified by HealthPartners as someone who needed help to control her disease. She had been admitted for kidney stones, one of many possible complications of diabetes. Although she had insurance through her husband, she was unemployed.

Since leaving the hospital, where she was admitted for 12 days for a series of complications from the surgery to remove the stones, Ms. Meath has been in regular contact with one of HealthPartners’ nurses, who serves as a case manager. The nurse calls at least once a month and checks in after she goes to the doctor for any developments. The health plan also assigned a social worker to help her with the cost of medications and other obstacles that were preventing her from taking better care of herself. “It makes me feel like I’m not alone,” Ms. Meath said.

“They’re trying to prevent the big things from happening, which is great,” she said.

But the iron-clad evidence of the effectiveness of this intervention is still lacking.

Health plans tend to cite compelling anecdotes – but here’s what we should look at to assess efficacy of these programs

Structure 

a. What intervention is in place?    Are the elements evidence-based?  Is there a measurement plan?

Process

a.     How many of the targeted high risk members actually participate?  Many health plan programs have half or more targeted members refuse to participate.   That sharply limits potential effectiveness

 Outcome

a.     Are there changes in clinical course due to the intervention?

b.     Are there beneficial financial outcomes as a result?

There are two major problems with the outcome evaluations I’ve seen – most of which have focused on only program participants.  

The first is regression to the mean.  The likelihood that Wendy Meath will be hospitalized again over the next year is low.  This doesn’t mean that the intervention has been successful – it’s what you’d expect in the year following such an admission.

The second problem is selection bias. The half of patients who eagerly participate in the intervention are fundamentally different than those who refuse.  Even efforts to do “propensity matching,” to try to adjust for known differences between participants and nonparticipants, aren’t effective for adjusting for these differences.

We should only attribute cost savings to these programs if there are cost savings over the entire population.  Further, we should only find claims of success believable if enough members were engaged to credibly lead to the claimed cost savings.

I believe that high risk programs performed in the provider realm are likely to get more patient engagement – and could lead to more success in preventing bad outcomes and lowering costs.    Health plan leverage in the future might have more to do with payment reform than with hiring legions of remote nurses.

Of course, we will have to measure that too!

Read More

Medicare: A Deal Too Good (Or Too Misunderstood) to Last

Today’s Managing Health Care Costs Indicator is 3:1

 Click to enlarge. Source

The New York Times had a thoughtful article on Sunday about our conflicted view toward government programs.  The reporters interviewed citizens of the exurbs northeast of Minneapolis, where a Tea Party candidate unseated a senior Democratic congressman in 2010.   The government safety net is helping many cling to middle class status – but many citizens think the government should do less, even if it’s painful today, to lower the future deficit.

One thing there is little disagreement about is that Medicare is a good idea.   The current Congressman suggested that Medicare be dismantled for those (like him) under 55 – but most of the interviewees were quite happy with Medicare. Most of them counted on it too.   That’s why most don’t worry too much about the Ryan plan to privatize Medicare becoming law.

Although most Americans think they will pay more in Medicare premiums and taxes than they will get in benefits, Americans get $3 in benefits for every $1 they pay into the system. The rest is paid for out of general tax revenue.  Medicare represents the most rapidly-rising governmental expense, and we baby boomers will be continuing to retire for   years to come.

Medicare clearly needs to either lower its spending, increase premiums for beneficiaries, or increase its draw on general tax revenue.  Medicare has been more successful at holding down costs than commercial health insurance plans – but revenue of only a third of its costs isn’t financially sustainable. Medicare might also be politically unsustainable if its current and future beneficiaries don’t realize what a good deal they’re getting.

Read More

It's STILL the Prices

The New York Times has an editorial today again reminding us that the prices of care in the US are the major reason why costs are so much higher here than in other developed countries.

Here's the accompanying graphic:

Click image to enlarge.   Source 

Read More