Doctor murdered; Gun legally obtained

A cardiologist was murdered yesterday at the Brigham and Women’s Hospital in Boston by  the son of a former patient.

According to the Boston Globe:

Millbury police Lieutenant Donald Desorcy said Pasceri was properly licensed to possess a firearm. “They are a very good family,” Desorcy said. “Never any problems, as far as we are concerned.”

So he was licensed “properly” according to our laws. The gun also worked “properly” as intended by its manufacturer and owner. If the shooter had been a member of “a well regulated Militia” defending the State, that would be one thing. But of course it’s not the case.

Total cost of care and health equity in Minnesota: Conversation with MNCM’s Jim Chase

Jim Chase, president of Minnesota Community Measurement

Jim Chase, president of Minnesota Community Measurement

Minnesota Community Measurement (MNCM) is a national leader in bringing together healthcare stakeholders to address important, but difficult quality and cost issues. In this podcast interview, MNCM’s president Jim Chase and I discuss two new reports, one on the total cost of care and the other on health inequities.

Here are the topics we covered, along with timestamps:

  1. What is MNCM? (0:10)
  2. You have released a total cost of care report for MN physician groups. What is total cost of care? (0:38)
  3. Why does total cost of care matter? (1:16)
  4. What adjustments do you make for the health status of patients in different practices? Do you exclude patients who are outliers? (1:46)
  5. How applicable is the TCC metric to an individual patient deciding where to seek care? (2:56)
  6. To what extent is TCC a proxy for negotiated rates as opposed to total resource use? (4:08)
  7. What stakeholders were involved in bringing this report to fruition? (5:23)
  8. Why do you think MN is the first state to issue a report like this? (7:23)
  9. How do you pair total cost of care with quality? (8:38)
  10. You’ve also recently released a Health Equity report. What kinds of inequities are included? How are they measured? (9:42)
  11. What are some key differences you observe? Do they match up with the hypotheses you went in with? (11:08)
  12. This is a touchy subject, so how did you get everyone to cooperate? What was MNCN’s role? (12:54)
  13. Beyond identifying that there are inequities, how do you address them? (14:14)
  14. Are there any explicit linkages between the TCC and Health Equities reports? (15:10)
  15. It’s been a busy couple months for MNCM. What’s next? (15:52)

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

New England Baptist on the move: I’m quoted

New England Baptist hospital, renowned for its focus on orthopedics, is considering a move from its Mission Hill perch. The existing facility is old and probably more trouble than it’s worth to renovate. It’s rational to consider building a new facility rather than renovating the old one.

The Boston Globe (N.E. Baptist Hospital plans a move) covers the story, focusing on the implications for the Mission Hill neighborhood and the character of the Baptist.

I’m quoted:

“When you have an old facility and you’re trying to work in a modern era when people care about efficiency and collaboration, it can be very difficult to remodel your old quarters,” said David E. Williams, president of the Boston consulting firm Health Business Group. “It makes sense for them to at least contemplate moving.”

Meanwhile, don’t hold your breath. This could take a decade or more.

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


The folly of high deductible health plans

Now that's what I call value-based pricing!

Now that’s what I call value-based pricing!

They used to call high deductible health plans “consumer-directed” plans. That was before people realized there is nothing particularly consumer driven about them. A recent poll –not the first of its kind– shows that people with high deductible plans tend to forego care. In fact they skip both unneeded and needed care. Most people don’t like the plans so much when they get sick.

Naturally the current negativity about high deductible plans is mixed up with discussion of the Affordable Care Act, aka ObamaCare. The lowest tier Bronze plans have cheap premiums but high deductibles. This very typical article on the subject (Skipped Care A Side Effect Of High-Deductible Health Plans) from the Seattle Times comes complete with the requisite Republican representative trashing ObamaCare. What this article and almost all similar ones miss is that low income people should purchase Silver tier plans. Not only will they receive valuable premium subsidies, they’ll also be eligible for cost-sharing subsidies that reduce out-of-pocket costs, thus neutralizing the usual criticism of ObamaCare. (By the way, details like this are why the law has a lot of pages in it.)

In the private sector things are different and worse. Employers that offer high-deductible plans are effectively penalizing their low wage employees and rewarding those with high incomes. That’s because those with limited incomes are more sensitive to the high out of pocket costs. They’ll self-ration and hold overall medical expenses down. Meanwhile, high wage employees won’t be nearly so affected. High income people I know who have high deductible plans just don’t think hard about avoiding the out-of-pocket payments. Their premiums will be lower than they should be because utilization is held down among the lower wage folks on the same plan.

Meanwhile, the high deductible plans are totally ineffective at cost containment once the relatively low out-of-pocket maximums are reached. For example, anyone having even minor surgery will blow right through the maximums and have no incentive to keep a lid on costs after that.

A better approach would be to offer policies that reward patients for using efficient providers and provide a premium rebate to those who do.

photo credit: theamericanroadside via photopin cc

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


Hepatitis C drug battle. What’s going on?

Just give me the cheapest one

Just give me the cheapest one

Makers and buyers of new Hepatitis C drugs have been slugging it out in public lately. What’s going on and what are the broader implications?

Pharmacy benefit managers, health plans and drug makers have been gearing up for this fight for a while. Many baby boomers contracted Hepatitis C from IV drug use and other excesses back when they were flower children. But available treatments have been difficult to tolerate and not always that successful, so as a result there is a huge pent up demand for an easy-to-tolerate, curtive treatment. Enter Gilead with its Sovaldi (sofosbuvir).

The roughly $85,000 price tag for a course of treatment is pretty high, but Sovaldi is not nearly as expensive as some other specialty products that no one makes a big stink about. The real issue here is the large number of potential patients and the overall near term financial impact of Sovaldi on those who are paying the bills. Sovaldi has a decent value proposition, too: save money and improve quality of life by avoiding liver transplants.

Meanwhile, payers led by Express Scripts, a large pharmacy benefit manager, have been beating the drum against the high price of Sovaldi. They have been talking out of both sides of their mouth: they don’t want price controls (after all, that would put them out of business), but they do want lower prices that they consider to be fair.

Express Scripts has been licking its wounds for some time, writing big checks to Sovaldi’s maker Gilead. But now there is a competing drug on the market from AbbVie, called Viekera Pak (a stupid name in case you want my opinion). Express Scripts made a bold move by striking an exclusive deal with AbbVie in an effort to lock Gilead out. Things looked a little tough for Gilead at first, but now the pendulum is swinging in the other direction. First, Express Scripts competitor CVS made an exclusive deal with Gilead. That wasn’t a huge surprise. But then, Express Scripts’ biggest customer, Anthem also made an exclusive deal with Gilead. The Anthem deal undercut the value of Express Scripts’ arrangement with AbbVie and undermined Express Scripts’ credibility.

My guess is that none of the payers extracted a massive discount from the companies. I also think doctors will retain a reasonable degree of discretion in choosing which product to prescribe. None of the exclusive deals bar patients from getting the competitor’s drug; they just make it harder.

What’s striking about the Hepatitis C battle is that it’s clearly all about the money. None of the parties have really tried to claim that the deals are based on clinical considerations.

What we don’t know yet is what the battle over Hepatitis C drug pricing means for other high price specialty drugs. For example, will payers push back more aggressively on pricing or availability for cancer drugs? Will they try to pit manufacturers against one another? How steep will any discounts be? Will doctors and patients rebel? Will they enlist state legislatures and Congress? How about the courts?

Stay tuned as we find out.
photo credit: incurable_hippie via photopin cc

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

Hepatitis C drug battle: I’m quoted

The chess game among Gilead, AbbVie, pharmaceutical benefit managers and health plans on expensive but effective Hepatitis C treatments is well underway. I’ve been following the story for quite a while –and asked all of the candidates for Massachusetts Governor about it a year ago.

Now I’m being interviewed about it, most recently for AIS’s Health Plan Week (Health Plans Join in Action as PBMs Make Exclusive Deals for Competing Hep C drugs). The publication is behind a firewall but includes my skepticism that Express Scripts will accomplish very much with its tough stance.

I’m expecting to be quoted in other articles soon, and may write about the topic later this week.

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