Category Archives: Culture

What’s the difference between New York and Boston?

A million here, a billion there

A million here, a billion there

We are modest and moralistic in Boston. The lead story in the May 1 Boston Globe criticized Vertex Pharmaceuticals for approving a plan to pay a dozen executives a total of about $54 million if the company becomes profitable, something that has taken 25 years to achieve. If the company becomes profitable it will be because it successfully launches a new drug that will improve the lives of people with cystic fibrosis. Sounds pretty good to me.

The bonuses represent an insignificant percentage of the $15 billion increase in Vertex’s market value in the past 12 months. Critics can complain all they want, juxtaposing the high prices insurers pay for medication with the bonuses awarded. I just don’t see this as a headline issue.

Meanwhile the New York Times yesterday led off with an article about the top paid hedge fund managers (For Top 25 Hedge Fund Managers, a Difficult 2014 Still Paid Well). The top 3 managers each made about $1 billion. That’s right, each one made 20x what the dozen Vertex managers might be due for collectively. To make it to #25 on the list required earning $175 million, still far, far above the Vertex dozen. Oh, and by the way most of the hedge funds had mediocre performance in 2014, in the low single digits, and their operations didn’t contribute much, if anything to improving society.

Some of the funds employ scientists (physicists and astronomers are two examples provided) to help with their trading, yet they earned returns far lower than the non-geniuses who bought and held the S&P 500. Vertex critics are up in arms about taxpayers indirectly paying executive bonuses, but maybe they should instead scrutinize public entities such as pension funds that are paying large fees to hedge funds.

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By healthcare business consultant David E. Williams, president of Health Business Group.

Do it yourself death panel

How are you feelin' today, mom?

How you feelin’ today, mom?

Federal law allows states to recover Medicaid costs from heirs. This little known provision is getting more attention as part of the debate over Medicaid expansion. The Wall Street Journal (New Wrinkle for Health Law) wrote a balanced article about it, highlighting consumer fears about having to sell assets while also sharing the government perspective that “estate recovery helps shore up the program for others who need it.”

The online comments and letter to the editor generally support the view that recipients’ estates should have to pay back the government. The letter (First, Estates Should Repay the Taxpayersis characteristic of the righteous indignation provided by the commenters.

Where is it written that a person is entitled at death to leave assets to children, particularly after someone else, in this case the taxpayers who fund Medicaid, has paid the health-care bills? Where is it written that children are entitled to inherit assets from a parent who has unpaid bills for services received during his or her lifetime?

Maybe if the issue were framed differently the commenters would rethink. Two points in particular:

  • If we seek to reclaim Medicaid payments we need to reclaim Medicare payments as well. Although recipients pay into the system, Medicare is far from self-sustaining. More than 40 percent of Medicare spending is financed from general revenues.
  • If the government starts going after estates for medical expenses more broadly, dying patients will worry that heirs will ration care to preserve their own inheritances. And with so much at stake, it’s not a paranoid thought

So here’s my question for the commenters and letter writers: Are you willing to expand this logic to Medicare and provide your own heirs with an incentive to form a death panel for you?

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By healthcare business consultant David E. Williams, president of Health Business Group.


E-cigarettes: the California Cooler of the 21st century

Just a harmless, tasty treat?

Just a harmless, tasty treat?

If like me you came of age in the 1980s you remember the California Cooler, a sweet wine/juice combo that made it easy for kids to start drinking alcohol even if they couldn’t handle the “adult” taste of beer, wine or liquor. They were very popular at the time but I don’t recall anyone ever saying they were a healthy alternative to anything.

Fast forward 30 years to the e-cigarette era. New data show 13 percent of high school students use e-cigarettes. From the Boston Globe (E-cigarette use spikes among American teens)

In interviews, teenagers said that e-cigarettes had become almost as common at school as laptops, a change from several years ago, when few had seen the gadgets… A significant share said they were using the devices to quit smoking cigarettes or marijuana, while others said they had never smoked but liked being part of the trend and enjoyed the taste — two favorite flavors were Sweet Tart and Unicorn Puke, which one student described as “every flavor Skittle compressed into one.”

Policymakers are confused. E-cigarettes seem safer than smoking, and at least some people must be using them to try to quit. But my view is that at least for kids they lower the barriers to unhealthy behaviors by making drug use more like having a candy or soft drink. The FDA banned nicotine lollipops. Why is this different?

I’m concerned about this delivery method for nicotine, but I’m also worried about marijuana. E-cig entrepreneurs have been busy finding ways to use the devices to deliver THC, and there is a big rise in marijuana laced foods, so-called edibles or medibles. Let’s not fool ourselves and our kids by pretending these drugs are harmless treats.

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By healthcare business consultant David E. Williams, president of Health Business Group.

Cancer drugs: Why the high and rising prices?

Cancer drugs. Good stuff cheap?

Cancer drugs. Good stuff cheap?

When Americans talk, pharmaceutical companies listen. And what they’ve heard is that initiatives to contain or regulate medical costs get labeled as “rationing,” a word with very un-American connotations.

While politicians wring their hands, pricing strategists at pharma and biotech companies take action by charging high and rising prices for products for life-threatening illnesses. Cancer is Exhibit A, with many drugs costing more than $100,000 per year of treatment. A JAMA Oncology paper reviewed wholesale prices for cancer drugs approved over the past five years and found that prices are not correlated with a drug’s novelty or efficacy.

The authors conclude:

“Our results suggest that current pricing models are not rational but simply reflect what the market will bear.”

Now it’s possible that there is a greater correlation between actual negotiated prices and novelty or efficacy that isn’t showing up in the researchers’ data on wholesale prices. Still, the main conclusions are likely to stand, and spending on cancer drugs is sure to grow as more drug developers respond to market signals and develop new products.

If those who pay the bills, including private insurers, employers, and the government want to do something about cancer drug prices, they’ll need to embrace objective ways to measure cost effectiveness, and not be afraid of an opponent throwing around the “rationing” word. They’ll have to couple that approach with a commitment to personalized (or “precision”) medicine so that individuals get the specific drugs that are most effective for them, even if they don’t work as well for the general population.

The outcry over Sovaldi pricing for Hepatitis C has shown that there is at least some appetite to take on drug prices, but I don’t expect any dramatic clampdown on cancer drug prices in the near term.

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By healthcare business consultant David E. Williams, president of Health Business Group.

Patient portals: Hiding in plain sight

Many physician offices have patient portals, since they’re a requirement for Meaningful Use Stage 2. But a new survey from Software Advice confirms what we knew intuitively – these portals don’t get much use. Patients don’t know they exist and doctors don’t use them a whole lot. That’s kind of odd considering that portals can be useful and efficient. They’re good for checking lab results, asking non-urgent clinical questions, renewing prescriptions, managing appointment schedules, patient education and paying bills.

Why then is uptake so low? I have a few ideas:

  • The systems are clunky -frustrating to navigate, often down for maintenance or for no explained reason, and slow
  • Workflows are awkward. For example a physician may have access but her admin may not
  • There’s often no value proposition for a physician who wants to use a portal
  • Messaging is inflexible with no access to attachments web links or other enhancements
  • Some of the more important communications, like sharing a diagnosis don’t lend themselves to asynchronous communications
  • Privacy and security remain concerns and the required safeguards create barriers

Contrast the weak state of portals, which have been available in one form or another for 20 years, with other changes in communication that have been embraced much faster. Think texting, Skype, and mobile commerce, all of which have rocketed to prominence since patient portals were invented. I do think we’ll get there, but it will take a new generation of doctors, patients, software developers and payment models to make it happen.

You can find the original item from Software Advice here.

Medicaid expansion rejection starts to bite

What happened to my hospital?

What happened to my hospital?

In its ruling upholding the Affordable Care Act, the Supreme Court did allow states to opt out of the expansion of the Medicaid program, which serves the poor. My feeling at the time –and still today– is that you’d have to be pretty ideologically rigid and stubborn or just plain uninformed to turn down the expansion. The feds pay 100 percent of the expansion’s cost in the first three years and at least 90 percent thereafter.

Try hard and you can find reasons to oppose the expansion — maybe the feds will go back on their word, maybe Medicaid will make people lazy– but these are hypothetical and farfetched. Meanwhile, the costs of not expanding Medicaid are very real, in the form of billions of dollars in foregone funding for the provision of healthcare to the poor and the undermining of communities that lose their hospitals.

Twenty-four states, including almost the whole South, took the stubborn path and have so far refused to expand Medicaid. They’re starting to experience the consequences.

A George Washington University study reveals that more than 1 million patients who use community health centers will lose out on coverage because their states refused to expand. One-third are in five Southern states: Alabama, Florida, Georgia, Louisiana and Mississippi.  That’s putting a strain on community health centers, many of which will lack the funding to provide needed care.

Meanwhile a Wall Street Journal article (Rural Hospitals Feel Pinch) highlights the strains confronting rural hospitals as the world changes around them. The article features a hospital in a rural North Carolina community that’s closing. In the 21st century, losing a hospital is a major blow for a town or rural region. It’s often the biggest employer, a major driver of other local businesses, and a key to quality of life. Once it’s gone it’s not coming back any time soon.

Failure to accept the Medicaid expansion isn’t the only reason rural hospitals are struggling, but it’s a big part of the equation. Southern politicians are trying to make policy changes to shore up rural hospitals, but their efforts are a drop in the bucket compared to the funds that flow from the feds.

Rural America is the most Republican part of the United States. At least on Medicaid expansion, many rural citizens are poorly represented by the people they vote for. There’s an election coming up in November and folks would be wise to re-examine their assumptions before casting their ballots.

photo credit: Range of Light via photopin cc

By healthcare consultant David E. Williams of the Health Business Group

It’s ok to care about your work, especially if your job’s at a children’s hospital

Who cares?

Who cares?

The Wall Street Journal has become more like Cosmo since Rupert Murdoch took it over, with all sorts of advice on life and work mixed in with the serious business and other news. Some of the articles are pretty decent and I enjoy reading them, even if they are a bit fluffy.

Sue Shellenberger’s piece (When It Comes to Work, Can You Care Too Much?) is about people who love their employer so much that they get carried away and take things too personally. They care about whether someone is wrongly promoted in another department and get upset when their employer strays from its mission.

We learn of the two types of people, the “organization lover” who cares too much but is a strong team player, and the “free agent” who is more calm but also seen as cynical.

The impetus for the article is a book by an employee who “fell in love” with BP because she heard the CEO talk about reducing greenhouse emissions. Eventually she became disillusioned and wrote a book about it. The article seemed like a harmless diversion about a pretty obvious topic. Clearly it doesn’t make sense to get too carried away about working for an oil company, you don’t want to be a busybody obsessed with everyone else’s business, and there’s a need to strike a balance.

They could have left it at that.

But then the very last example was about a nurse educator who moved from an internationally renowned pediatric hospital to a small hospital when her fiancee got transferred.

Employees there were using what she regarded as outdated methods of managing infants’ breathing tubes and other aspects of respiratory care, says Ms. Pender, who had worked as a neonatal intensive-care nurse for the Children’s Hospital of Philadelphia.

“I didn’t want to come across as a know-it-all,” she says. She quietly observed her colleagues. She met with a nurse educator and showed her research and videos on new techniques. She created a written survey for other nurses, asking their opinions. And she sought out allies, joining a hospital task force on improving care. Then a new manager arrived who supported her ideas.

Ms. Pender and her fiancé recently moved back to the Philadelphia area, and she rejoined Children’s Hospital. Her former colleagues have adopted many ideas she advocated. She says she’s happy to know “positive changes are moving forward.”

I honestly don’t think this last example is really about loving your employer too much. If you’re going to work in healthcare –especially taking care of infants with breathing tubes– you better care about patients and their families. It should have very little to do with whether you are the type who likes or loves your employer.

photo credit: Kalexanderson via photopin cc

By healthcare consultant David E. Williams of the Health Business Group