Justifying EpiPen pricing, once again

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Back with more

I enjoyed Medical hackers create $30 DIY EpiPen in defiance of corporate greed over at inhabitat. The Four Thieves Vinegar collective cobbled together an “EpiPencil” from an auto injector for insulin, a hypodermic needle, and epinepherine. It’s a pretty cool trick but it proves nothing about EpiPen pricing nor does it help real patients.

Actually, it unwittingly reinforces the points I made in my very unpopular EpiPen may still be too cheap post, which is that the pricing of EpiPen has almost nothing to do with the cost of its parts.

Consider these caveats about the DIY EpiPencil from the inhabitat post:

However, it is worth mentioning that many experts have voiced concern about the EpiPencil and warned that it’s not advisable to try to create a piece of medical equipment at home – it can be difficult to ensure the correct dose is being administered, the epinephrine inside is delicate and might lose its effectiveness if stored this way, and of course, if someone were to create the device without paying close attention to hygiene, it could become contaminated. A miscalibration of the device could even cause the medicine to be injected into a vein, which can have dangerous side effects.

To recap, here’s what you’re paying for when you buy a real EpiPen:

  • The ability to send your kids to school, playdates, summer camp, hikes, and restaurants with reasonable confidence that they’ll survive an allergic reaction
  • An auto-injector that works. Remember, Twinject was rejected by the market for being clumsy, Auvi-Q was recalled because it could administer the wrong dose, and Teva’s autoinjector was rejected by FDA for “major deficiencies”
  • A device that many, many people know how to use: school nurses, babysitters, passers-by. That means someone is likely to be there to help you if you need it. Good luck with getting someone to learn how to use your EpiPencil in an emergency, even if somehow it worked as advertised

EpiPen’s maker, Mylan has done a lot of sleazy things, which I don’t defend, and as a result they may well deserve the opprobrium that is being directed at them. But I stand by my argument that EpiPen is not $2 of epinephrine and a syringe. Instead its a differentiated solution that provides plenty of value to users.

If someone can come up with something better and cheaper, please do!

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

Public option pops up again

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Where do we go from here?

The so-called “public option” is back on the table. According to Politico there’s a “feud” between liberal and moderate Democrats about the wisdom of such an approach. That’s an overstatement, and really it doesn’t even matter if they are fighting about it or not.

Health insurers have a problem, which is that it’s hard for them to prove that they add value. Does all their utilization management, network development, formulary administration and price negotiation improve cost, quality and patient experience enough to justify the extra administrative costs and hassles they impose on the system? It’s an open question, and one that health plans have a hard time answering convincingly.

Since the Affordable Care Act (ACA) passed, health plans haven’t really had to address this fundamental question. With all the new regulations, marketplaces, and mandates, customers and plans have been busy getting themselves into compliance and learning and testing out the new system. No one has really asked the question about whether we need plans or not.

ACA health insurance marketplaces in some parts of the country are seeing less competition than is ideal as some health plans give up. Aetna gave the feds the middle finger by announcing plans to exit exchanges in retaliation for the government’s opposition to the company’s mega merger plans. The exchanges are fixable but opponents in Congress prefer to let them die if possible rather than fix them. However, this passive aggressive approach to the exchanges could ultimately backfire if it means the government sponsors a “public” competitor to give people choice.

For some, opposition to the ACA is ideological. They don’t like federal mandates, or expanding access to birth control, or they just don’t like Obama. But opposition to the public option is more about business considerations than ideology. Apple wouldn’t be worried if the government started making smartphones, but health insurers are worried about whether they can do a better job than Uncle Sam.

And let’s face it, a government option brings us a big step closer to a single payer system under which insurance companies would essentially be out of business.

Health plans don’t have to worry too much today about single payer or even a public option. Even Senate Democrats can’t agree, so it’s unlikely a public option will make it through Congress. But give it another 10 to 15 years and we’ll see.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

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

Health Wonk Review is up at Colorado Health Insurance Insider

Times flies when you’re blogging away. And believe it or not Colorado Health Insurance Insider has turned 10 years old. Blogger Louise Norris rises to the occasion with a comprehensive and compelling edition of the Health Wonk Review.

Although, if the beloved Cavalcade of Risk of blessed memory were still running, they might have a word or two to say about the safety of the candles on that cake!

MedSentry: Adherence for complex drug regimens (podcast)

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Medication adherence is a tough challenge, especially for high-risk patients, whose complex drug regimens often feature more than a dozen pills. MedSentry is rolling out an end-to-end closed loop adherence system for this population. Although it’s not a large group, it is responsible for a disproportionate share of medical costs.

In this podcast interview, CEO Adam Wallen and I discuss the following:

    1. (0:11) Adherence is a big problem in healthcare. What does it mean? What’s the nature of the problem?
    2. (0:57) Are there multiple reasons for lack of adherence?
    3. (4:05) There are a number of adherence solutions in the market. How well do they work?
    4. (7:46) What is the MedSentry approach? How is it different?
    5. (11:57) What evidence is there that this approach is effective?
    6. (13:17) You have focused on the most complicated patients. Will that continue to be your niche as your commercialize?
    7. (14:55) Do you have a scale-up plan?

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

LBJ would think walking meetings are pretty lame

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Don’t talk to me about walking meetings

The Wall Street Journal continues to go soft on us. I just read about “walking meetings,” which are just what they sound like: conducting meetings while walking around. According to the Journal, these meetings are great for combating obesity and diabetes, and improving creativity. With meetings, phone calls and emails taking up more than 90 percent of the workday for some people (consultants like myself included), the Journal touts studies purporting to show the benefits of wandering around at work.

Walking meetings aren’t really new. Kaiser’s Dr. Ted Eytan touted the idea on my blog five years ago.

Sure it’s good to get moving, and taking a walk can be just the thing to clear one’s head, but when I’m in a meeting I’m usually taking notes and often viewing documents. Many meetings are confidential and sometimes they involve 10 or more people. So IMHO most serious meetings are not suitable for walking.

When I was an economics student at Wesleyan in the 1980s, professor Stanley Lebergott told me about a pretty crazy job interview his colleague Douglas Cater had with Lyndon Johnson at the White House –swimming nude in the pool and having to keep up with Johnson while trying to answer questions. Although I believed my professor, you might not, so here’s how it’s recounted in Jack Valenti’s memoirs:

I’ll never forget the day LBJ brought Doug to the White House to sort of interview him. ‘Let’s go for a swim, Doug. Okay with you?’ said the president. Well, of course it was, so Doug, Bill Moyers, and I followed the president to the swimming pool. Doug’s eyes almost popped out when LBJ, Bill, and I threw off our clothes and jumped into the pool, nekkid, as we say in Texas. After a moment’s hesitation, Cater stripped and plunged in, too.

As we splashed around, the president began chatting with Doug about his ideas for making the Johnson administration more effective. I daresay, many of us have been interviewed in odd places, but as Doug said later, ‘Nothing compares with my waterlogged birthday suit interview with the president.’

Compared to this, walking meetings are nothing. Can’t the Journal find something more inspiring or scandalous to write about?

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

Health Wonk Review: Back to School Daze

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Ah Labor Day! A final blush of summer before jumping back to work and into the school year. Here’s a pretty serious set of posts as you settle back in to the fall routine.

The opioid epidemic

Managed Care Matters tells tales from the front lines of the opioid epidemic. Not pretty. Not pretty at all.

Health Affairs Blog shares insights on the development of a “safe space and medical monitoring to prevent overdose deaths” in Boston. This excellent post describes the observation and treatment facility (which is not a supervised injection facility) and lays out five policy lessons learned to date.

Insurance and the Affordable Care Act?

The Obamacare insurance exchanges are in somewhat rough shape, but as Wright on Health explains, there are some pretty straightforward fixes. Politics (as usual) is likely to get in the way.

If you were somehow under the illusion that Health Care Renewal was a fan of managed care mergers (and for-profit, managed care companies in general) this week’s post should erase any doubt. In fact, it’s a trip down memory lane from the early 1990s formation of Aetna and its merger with US Healthcare to today’s politically motivated withdrawal from the exchanges to retaliate for the government’s opposition to a new mega-merger.

Oh boy. Insurance is about spreading risk, but you have to be pretty darn to big to spread around the expense of a $1 million/month chronically ill patient. That’s what Wellmark is having to do, and InsureBlog says good for them, it’s insurance working the way insurance should.

Ready for the fourth Obamacare open enrollment period, coming up in November? Healthinsurance.org has a guide to what’s new.

Technology and population health

Is that the best we can do?  HealthBlawg does not think health systems deserve credit for leveraging Uber to get people to their appointments. Telemedicine is the way to go, instead.

Population Health Blog, on the other hand, applauds the potential of personalized, tech-enabled approach to diet.

Like HealthBlawg, The Hospital Leader wants to focus on social determinants of health to keep people out of the hospital.

Drugs are pricey

Healthcare Economist describes various value frameworks that can help life sciences companies evaluate and justify the value of innovative approaches.

I made a few new enemies at Health Business Blog with my contention that EpiPen prices may still be too low.

And Health System Ed rounds out the wonkery with a post on drug prices, EHRs, and the Affordable Candidate. Big topics all!

A hopeful finish

Workers Comp Insider shares a firefighter’s miracle: a face transplant after sustaining severe burns.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

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

Dr. Joshua Newman, GM for Healthcare at Salesforce, discusses telehealth solution

Dr. Joshua Newman, MD, MDHS, Chief Medical Officer, Salesforce

Joshua Newman, MD –Salesforce’s Chief Medical Officer

I really like Salesforce’s Health Cloud approach to patient engagement and am excited to see the company add telehealth to the platform. I caught up recently with Dr. Joshua Newman, who is Chief Medical Officer for Salesforce and also General Manager of Healthcare and Life Sciences.

In this podcast interview we discussed the following:

  1. (0:12) How has the rollout of Health Cloud gone since our last discussion about a year ago?
  2. (2:03) There are other telehealth offerings on the market already. Is the new Health Cloud offering different or better?
  3. (4:21) Who is the target user? Is the telehealth solution aimed at particular types of providers or patients?
  4. (6:55) Is there a return on investment? What drives it?
  5. (9:02) Is this mainly a mobile solution?
  6. (9:55) How does the telehealth solution fit with other Health Cloud offerings?
  7. (12:38) What else can we expect from Health Cloud over the next year?

I came away with the conviction that there is the potential for significant impact as the platform matures, health care-specific partners are brought on board, and as customer/patient engagement practices in healthcare catch up with the rest of the economy.

I’m looking forward to hearing more, especially with the big Dreamforce conference coming up in October.

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