The announcement that Dr. Robert Califf has been nominated to become the next head of the FDA offers no encouragement that the failures and corruption of the FDA will be addressed in the foreseeable future. As Sabrina Tavernise writes in the New York Times, “…he has deeper ties to the pharmaceutical industry than any F.D.A. commissioner in recent memory, and some public health advocates question whether his background could tilt him in the direction of an industry he would be in charge of supervising.” As previously noted the FDA is a failed public agency with unanswered criticisms of regulatory approval of worthless and harmful drugs, flawed criteria for drug approval, lack of investigation of unpublished results of drug research products, and absence of oversight of the conclusions, methods, and conflicts-of-interest in published research studies. The agency’s uncritical use of R & D figures supplied by the industry makes the agency an unwitting apologist for outlandish U.S. drug prices. Hopefully Dr. Califf will be able to transcend his relationship with the pharmaceutical industry and use his knowledge and clinical sympathies to create a more honest, transparent, and effective agency.
There have been a number of good discussions of reference pricing. This concept is mainly applicable only to large employer sponsored plans. As Ricardo Alonso-Zaldivar from the Associated Press observed, “However, the strategy appears to be suitable only for a subset of medical care: procedures and tests that are frequently performed, where the prices charged vary widely but the quality of results generally does not. In addition to knee and hip replacements, that could include such procedures as MRIs and other imaging tests, cataract surgery and colonoscopies.” The idea is essentially incompatible with the insurance exchanges and narrow networks. And, is there any reason to trust the insurance companies to use a fair, patient-centered set of standards in establishing any given price? Or is it possible that they will game any such system to their own advantage? For instance, they have already found a way to make sure any additional expenses incurred by the patient will not be allowed to apply to the out-of pocket caps required by the ACA. Sarah Lazare in Common Dreams discusses some of the pitfalls in this latest experiment by CMS. In June, 2014, FamiliesUSA published an excellent brief by Lydia Mitts, “How To Make Reference Pricing Work For Consumers.” Ms. Mitts points out the potential financial risks of cost shifting to consumers if the insurance companies set their pricing too low making it difficult for patients to find providers who will accept the payments. She also mentions that those who do accept the prices might raise prices for other services. She concludes with an excellent list of key elements that would be necessary in order to make such a system work for patients. Unfortunately, the health insurance industry has shown little interest or ability to do such things as providing adequate networks or prioritizing (or even, measuring) quality. Don McCanne provided a good commentary back in 2013, which he summarized by saying, that CMS is saying “we should shift risk to the patients – exposing them to financial penalties should they not make perfect decisions in their health care purchasing, even as the private insurers create yet more barriers to perfectly priced health care!”
The goal to bring down prices of medical care is admirable but one more payment system just adds to the incomprehensible world of multiple payers, multiple (often conflicting) rules and regulations, confused eligibilities, unintended consequences, profit-making, rent-seeking and cost-shifting to the “consumer.”
There has been a lot of discussion about excessive CMS payments to the privatized Medicare Advantage plans. One area of special concern is the risk management adjustments that provide additional payments for the care of high risk patients. This leaves open a huge area for gaming the system by the insurance companies. Upcoding and adding new diagnoses (not those supplied by the attending physicians) seems to be on the increase. A recent article by Bob Herman in Modern Healthcare discusses this problem. Besides this chicanery of the insurance industry one of the most sordid aspects of the current debate is the overt buying of government by the same industry and the obvious bribery in the U.S. Senate. 53 Senators have sent a letter to CMS pressuring the agency to continue the overpayments. According to Open Secrets.org the two senators leading the pack have received more than $727,000 in campaign funds from the health insurance companies in the last 8 years; Mike Crapo $234,000, Charles Schumer $493,000. In the mind of Everyman this is unethical. But, then, we already know that our politicians are not answerable to Everyman.
Gov.Shumlin of Vermont has announced that he has given up trying to create a single payer medical system in Vermont. This is not surprising. There is no way that single states can obtain the authority to pool the present health care funding of our present system. This amounts to over 65% of today’s costs mostly paid by Federal programs, V.A., military, Medicare, Fed Employees and Fed share of Medicaid and ACA along with Fed prison expenses. Employers, many of whom are national or international, pick up most of the remainder of the bills. And single states do not have the power to control pharmaceutical prices and provider payments. As Don McCanne wrote of Gov.Shumlin, “He has shown us that it is imperative that we continue with our efforts toward a goal of enactment of federal single payer legislation.”. The only affordable way to do this and offer comprehensive coverage for everybody is on a national level
Gilead’s profits were up 246% in Q3.
As Becker’s Hospital CFO states, “The increased revenues were due to substantial product sales growth. Gilead’s product sales for the third quarter increased to $5.97 billion compared to $2.71 billion for the third quarter of last year.”
At this rate it won’t take long for Gilead to pay off the $11 Billion purchase price for Pharmasset and the hundreds of millions of dollars for clinical trials of Sovaldi, the $84,000 anti-hepatitis C drug.
Welcome to the free market.
The recent poll by the AP concerning health insurance deductibles with private policies only confirms what we knew was going to happen. People cannot afford health care even when they are insured. The trend for policies to have higher deductibles is just making the matter worse. Most of the policies being sold in the insurance exchanges are high deductible. Supposedly the consumer is at fault for picking premium price instead of level of coverage. The insurance companies are happy.
If the deductible prevents people from seeking medical care for illness and injuries or following treatment recommendations then those people are underinsured. As Obamacare increases the number of insured by 10-15 million people it is increasing the number of underinsured by many millions more. This problem will get noticeably worse year-by-year as the people who are use to good health develop an increasing number of medical problems that require them to pay $3,000 to $6,000 even before their insurance kicks in. And, of course, if the problem lasts into the next year then the out of pocket deductible starts all over again. And, God forbid, what if two people in the family get sick. For comments by Dr. McCanne see http://www.pnhp.org/news/2014/october/private-health-plans-no-longer-assure-adequate-protection.
For my Blog: Insurance Exchanges: The Fast Food of Health Care
There is no use complaining and talking about which insurance policy to buy, etc. Don’t fight the health insurance companies. It’s only going to get worse. The solution is single payer medicine, Improved Medicare for All.
Accountable Care Failure
Recent releases from CMS verify that 13 of the original 32 Pioneer ACO’s have quit even though year 3 isn’t even over yet. Keep in mind that all 32 of these organizations are sophisticated EHR driven medical care systems. The reason for quitting is that they could not qualify for earned shared savings and many reported losses. Interestingly enough there are still no reports of what the start-up costs were for all these entities and, of course, we have no estimates of what the national start-up costs would be if ACO’s dominated Medicare reimbursement across the country. Many facilities lack sufficient EHR systems and staffing to comply with all of the regulations in the Pioneer ACO experiment. And what is it costing CMS to administer the program? Even worse, none of this applies to private and exchange insurance policies.
All of this nonsense could be stopped with the creation of a single payer system.
In response to Comments in Becker Hospital Review I received these questions:
“Dr. Dave – I’d be interested in what outcomes you’d measure that really matter in the care of patients. And, what you’d suggest for a delivery and payment model(s).”
I submit the following answer:
I don’t know what background you are coming from. I’m a retired family doc with 27 years in private practice, 10 years working in and running a (salaried) rural health clinic and 7 years (salaried) doing urgent care in a >200 docs physician owned medical clinic and 6 years part-time in a low income clinic.
When talking about “measuring outcomes” remember the old saying (falsely attributed to Einstein) “Not everything that counts can be counted, and not everything that can be counted counts.” What are outcomes; mortality rate, days of pain free existence, avoidance of bankruptcy, peace of mind, years of life lost due to premature mortality (YLLs), years lived with disability (YLDs), healthy life expectancy (HALE) ? And to whom do we attribute increase and decrease; the patient, which doctor, an institution, the system, society? And, again, can numbers represent compassionate, concerned, competent care? So what does it mean to “measure”?
There are numerous problems with current pay for performance problems. One of the biggest problems is thinking that any sense can made of the current Rube Goldberg system of Obamacare plus >2000 insurance carriers. Any real solutions need to benefit every single person in our country. Pretending to measure performance in medical care is a political diversion of both CMS and the insurance companies.
As far as I’m concerned putting all physicians on salary with reasonable negotiations is the only way to help gain control of medical costs and create the leverage for improving quality by eliminating incentives for cursory encounters and unnecessary medical procedures.
Pay-for-Performance is a poisonous concept whose unintended consequences are far greater that any conceivable benefits. System improvement and re-development of the culture of a medical “calling” and ethos of peer responsibility are essential. So-called P4P and quality improvement efforts cannot begin to deal with the multitude of problems that face us.
We can’t (and shouldn’t) go back to a Dr. Welby picture but we don’t have to keep going in the wrong direction.
I’m in favor of a single payer system (improved Medicare for All). I’m also in favor of starting that improvement now. And I’m in favor of medical care reform in many areas (physician, hospitals, pharmaceuticals, medical appliances, costs, integrity, transparency, etc.) A single-payer system would require a tremendous amount of work to create the needed reforms but it’s the only system that can have the muscle to overcome the self-interest of the powerful stakeholders and ensure compassionate, competent, and cost-effective care for everybody.
I invite you to visit my blog site (HC-Reform) and “Like” what you like. For our present discussion I would start with Pay-For-Performance (http://wp.me/p4MwV3-m).
U.S. hospitals spend 25.3% of income for administrative expenses-the highest of 8 industrialized nations studied in this report. If we had the same percentages as Scotland or Canada we would have saved $140 billion in 2011 and even more per year since then. We could do that by having a simpler single payer system. Health Aff September 2014 vol. 33 no. 9 1586-1594