Loren Bonner , DOTmed News Online Editor
August 15, 2013
DMN: After Steven Brill’s blockbuster article in Time Magazine came out a few months ago, it feels like everyone is interested to know the real scoop on hospital pricing and what’s driving up the cost of health care. I think you have some opinions on this. Can you share your thoughts?
BK: Egregious hospital unit pricing is certainly one driver, but the truth is that over the last several decades, every health care sector has devised ways to extract money from the rest of us that they’re not legitimately entitled to. I’ve written extensively about the Specialty Society Relative Value Scale Update Committee (or RUC), the secretive AMA committee that has jiggered the relative value scheme that Medicare, Medicaid and most commercial payment systems are based on, driving up cost.
In my day job, I see health systems buying stakes in Pharmacy Benefit Management (PBM) firms, jacking up the generic pricing to their own members by 200% or more then telling their members that they’re managing their cost. Physicians are doing unnecessary procedures on patients, which not only costs a great deal but puts those patients at risk of physical harm. Primary care reimbursement has been driven down by Medicare and the commercial plans, which decreases visit time and increases the rate of specialty referrals and in turn produces much more costly care unnecessarily. Health plans push “choice” in networks, but having the right to go to a lousy doctor or hospital does nobody any favors, except by driving the cost up for less effective and efficient care. I could provide many, many more examples.
Continue reading “DOTmed – An Interview with Brian Klepper”
Note from Brian: The article below describes my recent keynote address to a large meeting of imaging center administrators, and appears in the Sept 2012 Radiology Today. I’m reposting it because it accurately reflects, in depth, the message that I tried to deliver.
Remarkably, the audience was evenly divided in their evaluations. Half thought it was a very important but difficult to hear talk. The other half thought I was a jerk and it was the worst talk they’d ever heard. My take on this is that the responses reflected an industry that has become comfortable with a lack of accountability and market forces, and that is highly threatened by change.
Published in Radiology Today, September 2012, 13:8, p18
A keynote speaker told administrators to expect businesses threatened by ever-increasing healthcare costs with new approaches that will change how imaging organizations compete.
When Brian Klepper, PhD, delivered his keynote speech to the audience at the AHRA annual meeting in Kissimmee, Florida, last month, it was not the feel-good speech of the summer. Klepper, whose companies develop and manage worksite primary care clinics for employers and manage specialty care for those employees, told the audience that his company had recently negotiated a deal in Indiana for $450 MRI exams in a market that had technical fees ranging between $1,750 and $3,200. That was the opposite of a warm and fuzzy message to the 900 or so imaging administrators attending the meeting at the Gaylord Palms Resort and Convention Center.
“Somebody like me is going to come in to your market, and your volumes are going to plummet because there is no way you can compete against a $450 imaging price when you’re currently used to getting $2,800 or whatever you’re getting,” Klepper told the audience. “That is the problem.”
Continue reading “Are You Ready for Intense Price Competition?”
Posted 5/7/12 on The Health Affairs Blog
A recent spate of commentaries on the continuing health spending moderation raise an important policy question: If the cost curve is well and truly bent, why are we investing so much of our policy energy on bending it further, when the more pressing problem is the declining percentage of Americans that can afford our health system’s astronomical costs?
Health spending the past two reported years (2009 and 2010) have grown in the high 3 percent range, the lowest growth rates since Dwight Eisenhower’s last year in office (1960), five years before Medicare.Medicare’s actuaries have pointed to the recession as a root cause. Yet even Medicare spending growth has subsided to about 5 percent in 2010, a development hard to attribute to recession since so few Medicare patients have first-dollar cost exposure. This analyst’s extensive industry contacts suggest no spending rebound in 2011 and 2012, despite an aging population and fee-for-service’s pernicious volume-increasing incentives in full force.
Continue reading “Barking Up the Wrong Tree: Affordability, Not Cost Growth, Is The Real Policy Challenge”
Posted 1/17/12 on Cracking Health Costs
Good article in the WSJ by Laura Landro called “What if the Doctor Is Wrong”, corroborates what I’ve been saying all along. A large number of patients are seriously misdiagnosed. Click here to read the article.
As with my last post about USA Today covering how most of the money in a health plans is spent by very few members, I’m very pleased the WSJ is covering the serious problem with how large numbers of patients are diagnosed, or should I saymisdaignosed.
Continue reading “Misdiagnoses Common (Per WSJ)”
Posted 1/1/12 on TechCrunch
“In the future we might not prescribe drugs all the time, we might prescribe apps.” Singularity University‘s executive director of FutureMed Daniel Kraft M.D. sat down with me to discuss the biggest emerging trends in HealthTech. Here we’ll look at how A.I, big data, 3D printing, social health networks and other new technologies will help you get better medical care. Kraft believes that by analyzing where the field is going, we have the ability to reinvent medicine and build important new business models.
For background, Daniel Kraft studied medicine at Stanford and did his residency at Harvard. He’s the founder of StemCore systems and inventor of the MarrowMiner, a minimally invasive bone marrow stem cell harvesting device. The following is rough transcript of the 6 big ideas Kraft outlined for me at the Practice Fusion conference.
Posted 11/2/11 on The Doctor Weighs In
There are an increasing number of do-it-yourself (DIY) technologies that allow individuals to test for different diseases (e.g., HIV) or monitor chronic conditions (e.g., diabetes, hyperlipidemia). Now home testing for human papillomavirus (HPV) has been added to the mix. The reason why this is important is that a recent large randomized trial has shown that home-based sampling for HPV is three times as sensitive as conventional Pap smears in detecting advanced HPV-related lesions or cancer. For invasive cancer, the home HPV sampling was more than four times as sensitive as cytology.
Continue reading “Home HPV Testing – A New Tool for Cervical Cancer Screening”
Posted 10/07/11 on The Doctor Weighs In
Every year the Cleveland Clinic announces the top 10 innovations that their experts think will impact healthcare the most in the following year. Here are the winners for 2012:
#1 Catheter-based renal denervation for resistant high blood pressure
People with hypertension (HTN) are at risk for heart attacks, strokes, and kidney failure. When high blood pressure cannot be controlled with three or more medications, it is considered resistant. One-third of Americans have hypertension and 20-30% of these cases are considered resistant. High blood pressure is the leading risk factor for death worldwide – worse than cigarettes. Until the development of renal denervation, there was no effective treatment for resistant hypertension. In a small randomized controlled trial, the Simplicity HTN study, 39% achieved target blood pressures and 50% had some measurable benefit compared to the controls, treated only with high blood pressure mediations that had no change from their baseline blood pressures. Average decrease in systolic blood pressure was an astonishing 35 mm Hg with a 12 mm drop in diastolic blood pressures. The procedure takes about 40 minutes and is performed in a hospital’s catheterization lab. If the results hold up – and if there are no unintended consequences – this could be really BIG (which, of course, is why it won the #1 slot on this list).
Continue reading “Cleveland Clinic Announces Top Ten Health Care Innovations for 2012”
First posted 9/10/11 on Kent Bottles Private Views
The realization that the American health care system must simultaneously decrease per-capita cost and increase quality has created the opportunity for the United States to learn from low and middle-income countries. “Reverse innovation” describes the process whereby an inexpensive innovation is used first in countries with limited infrastructure and resources and then spreads to industrialized nations like the United States.
The traditional model of innovation has involved the creation of high end products by companies in industrialized nations and the spread of these products to the developing world by adapting them to function in low and middle-income countries. Reverse innovation reverses the direction of spread with the United States borrowing new ideas and products designed for less wealthy countries in order to deliver health care more efficiently. (1)
Continue reading “Reverse Innovation & The Cost Crisis of American Healthcare”
WBUR/CommonHealth reporter Rachel Zimmerman went shopping recently for a pelvic ultrasound. She summarizes the results on a great new website called Healthcare Savvy. Here’s an excerpt:
I called each facility, and here are the prices I was quoted for a pelvic ultrasound:
–Mass. General: $2847 or $2563 (more on this later)
–Mt. Auburn: $971.96
–Diagnostic Ultrasound Associates: $516
All three quotes were for the imaging only and did not include professional services or other additional costs, I was told.
So, is it just me, or is a five-fold difference in price for the same procedure at three greater Boston facilities kind of shocking?
I called MGH back to make sure I heard right. Weirdly, on Wednesday, the ultrasound price was $2,847, but on Thursday it was $2,563. (Do I hear $2,000?) I called the hospital’s PR office for a comment on why it costs so much more. Here’s the statement they sent me from Sally Mason Boemer, Senior Vice President of Finance: “MGH typically benchmarks our gross charges with like institutions and find our charge levels to be consistent with other urban medical centers that have a significant amount of complex care, teaching and research missions, and a high uncompensated care burden.”
Paul Levy is a former large hospital CEO and now, an advocate for patient-centered, efficient care. He writes at Not Running a Hospital.
First published 6/30/11 on Health Populi
My mama told me you’d better shop around, as Smokey Robinson also told us. We now know it pays to shop the prices for digital imaging. The price of an MRI of the brain ranges from a low of $825 to a high of $3,600 within the Southeast region of the U.S. In the Northeast, the low is $1,540 and the high, $3,500. There are similar price “spreads” in other regions of the country for the same imaging study, and across other imaging modalities such as PET and CT.
The greatest regional variances by service type are for MRI scans of the brain, varying 747% between a low price of $425 in the Southwest to a high of $3,600 in the Southeast, based on an analysis from change: healthcare‘s Q2 2011 Healthcare Transparency Index.
Continue reading “You’d Better Shop Around: MRI Pricing Variances”
First published 6/19/11 on Not Running A Hospital
Dear Mrs. Smith, I am writing to inform you that we exposed your body to an unnecessary level of radiation during your visit to our hospital. Oh, by the way, that was two years ago. We don’t intend to do anything about this for you. Also, we have known about this problem for a long time, and we don’t expect to change our procedures for future patients. Just wanted you to know. Yours in delivering the best health care in the world, Chief of Radiology and CEO. (Jointly signed.)
That’s the essence of this article by Walt Bogdanich and Jo Craven McGinty in the New York Times. Here are excerpts:
Continue reading “Rads Are Good For You. Take Twice As Many”
First published 4/12/11 on Common Sense Family Doctor
According to the National Cancer Institute and the Centers for Disease Control and Prevention, the number of cancer survivors in the U.S. has increased dramatically in my lifetime, from 3 million in 1971 to 11.7 million in 2007. From 2001 to 2007 alone, the number of persons living with a cancer diagnosis rose by nearly two million. Most people would probably see these statistics as good news: an indication that our cancer treatments are improving and allowing people to live longer, or that earlier diagnoses are giving people a better chance to survive by catching localized cancers before they spread and become impossible to cure.
Continue reading “Book Review: “Overdiagnosed” and the Paradox of Cancer Survivorship”
First published 5/30/11 on the AFP Community Blog
Last week, the journal Archives of Internal Medicine published “The ‘Top 5’ Lists in Primary Care,” a physician-authored consensus statement that recommended five activities each for the specialties of family medicine, internal medicine, and pediatrics to pursue to reduce waste and improve quality. Here is the top 5 list for family physicians, together with related online resources from AFP By Topic collections:
First published 5/18/11 on Not Running A Hospital
If Medicare payments for proton beam therapy are what is driving the construction of too many such machines, why doesn’t Medicare change the reimbursement? That’s my simple question for the day.
What prompts it is this story from the Midwest, where University Hospital has entered the proton beam machine arms race with plans to spend $30 million. Here’s the story from MedCity News.
Few argue that proton therapy is ineffective, though many would like to see it subjected to rigorous testing. The National Cancer Institute (NCI) in 2009expressed concern that “enthusiasm for this promising therapy may be getting ahead of the research.” NCI experts worry about a lack of published randomized, controlled trials that show proton therapy works better than standard radiation therapy and increases survival, or improves quality of life for patients.
Cost is also a huge concern associated with proton therapy — and one reason so many hospitals are eager to jump into the proton therapy business. Medicare reimburses proton therapy at about twice the rate of standard radiation therapy, which prompts concerns that patients (or their insurers) could pay twice the price for a treatment that may be no more effective than the cheaper alternative.
This one would be paid for by a “a mix of capital, bonds and philanthropy,” according to Cleveland.com. What an obfuscation. No, it will be paid for with money! All of which has an opportunity cost. Dear Ohioans, you can do better with your money than throwing $30 million into this machine.
Open letter to Don Berwick at CMS:
Please make them stop. You can dry up this source of funds and improve health care and help control its escalating cost. Use the tools you have at hand.