Why Does The FDA Approve Cancer Drugs That Don’t Work

BRIAN KLEPPER

Posted 10/23/15 on The Health Care Blog

A new study in JAMA Internal Medicine finds that two-thirds of cancer drugs considered by the US Food and Drug Administration (FDA) over the past five years were approved without evidence that they improve health outcomes or length of life. (This study closely corroborates and acknowledges the findings published last year by John Fauber of The Milwaukee Journal Sentinel and Elbert Chu of MedPage Today.) Follow-up studies showed that 86 percent of the drugs approved with surrogate endpoints (or measures) and more than half (57%) of the cancer drugs approved by the FDA “have unknown effects on overall survival or fail to show gains in survival.” In other words, the authors write, “most cancer drug approvals have not been shown to, or do not, improve clinically relevant end points.”

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Will Specialty Drug Pricing Be The Straw?

Published 5/27/15 in Employee Benefit News

ALP_H_BK_0010Over the next few years, drug manufacturers will release a host of new drugs that are more complex and, in many cases, more effective than we’ve had access to in the past. There will be better solutions for common problems, and new solutions for uncommon ones. Specialty drugs, many of them “precision therapies,” will offer tremendous promise for better health outcomes across the breadth of human health and treatment.

Not surprisingly, most of these drugs will have breathtaking price tags, often a high multiple of conventional drugs. Specialty drugs are an exploding growth industry, with spending rising almost 20 times as fast as conventional drugs. Unless something changes, in just another five years we’ll likely spend more on specialty than non-specialty drugs. Or, for that matter, on doctors.

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DOTmed – An Interview with Brian Klepper

Loren Bonner , DOTmed News Online Editor

August 15, 2013

ALP_H_BK_0010DMN: 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.

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How TPAs Can Win

Brian Klepper

Published August 1, 2013 in the Self-Insurer

BK 711One of health care’s deeper mysteries is why third party administration (TPA) firms remain minor health plan players and, to a large degree, have been all but uncompetitive with the major health plans. Yes, the big plans have paid brokers more handsomely and have offered broader services, simplifying purchasing. But they have also offered mediocre-to-poor products at increasingly exorbitant cost. Why have TPAs as a group not distinguished themselves with better performance?

Most TPAs emerged as employer advocates, promising to protect their clients from the financially conflicted practices embraced by the major plans. But over time, many have become, as the term implies, administrators rather than managers, processing transactions without much focus on changing the ways that care and cost are delivered. Certainly in recent years, the majority have not attacked the egregious excesses that have made American health care so costly. Or to say it more simply, even though it has been in their clients’ interests, most have not done the hard work required to make health care cost less with better health outcomes, and so gain a quality and price advantage over their competitors. After all, there’s a good living to be had just putting together the coverage machinery processing claims.

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Why Congress Should Pass The Accuracy In Medicare Physician Payment Act

Brian Klepper and Paul Fischer

Posted 8/09/13 on The Health Affairs Blog

ALP_H_BK_0010Paul FischerWith the recent release of two mainstream exposes, one in the Washington Post and another in the Washington Monthly, the American Medical Association’s (AMA) medical procedure valuation franchise, the Relative Value Scale Update Committee (RUC), has been exposed to the light of public scrutiny. “Special Deal,” Haley Sweetland Edwards’ piece in the Monthly, provides by far the more detailed and lucid explanation of the mechanics of the RUC’s arrangement with the Centers for Medicare and Medicaid Services (CMS). (It is also wittier. “The RUC, like that third Margarita, seemed like a good idea at the time.”)

For its part, the Post contributed valuable new information by calculating the difference between the time Medicare currently credits a physician for certain procedures and actual time spent. Many readers undoubtedly were shocked to learn that, while the RUC’s time valuations are often way off, in some cases physicians are paid for more than 24 hours of procedures in a single day. It is nice work if somebody else is paying for it.

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Physicians, Health Systems and the Drive For Market Dominance

Brian Klepper

Posted 5/23/13 on Medscape Connect’s Care & Cost Blog

BK 711Several physicians have reached out recently to discuss attractive employment offers from health systems. They are invariably conflicted. They understand the trade-offs, that they’ll give up the autonomy they’ve become accustomed to in exchange for more money and fewer practice management headaches. On the down side, they’ll be accountable for generating significant revenues, sometimes independent of care appropriateness.

Most also are aware that the same care services they provide now will be considerably more expensive once they’re part of a system. Many appreciate that because health systems are corporations with a heavy focus on optimizing short term gains, their future employer’s loyalty is suspect. And then there is the question of whether the health system’s management team is competently preparing to be sustainable in a market that could change dramatically.

As health systems maneuver to dominate regional markets, driving utilization and gaining more leverage over contractual pricing, physician employment has become their principal lever. Primary care physicians (PCPs) are now precious commodities that can manage populations and steer patients into the system’s services. Other specialties – e.g., cardiology, orthopedics, neurosurgery and even gynecologic oncology – are desirable if they’re high yield, driving lucrative, intensive use of inpatient and outpatient services.

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Using Strong Carrots and Sticks To Drive Health Care That Works

Brian Klepper

Posted 5/09/13 on Medscape Connect’s Care & Cost Blog

ALP_H_BK_0010On a recent call with a large manufacturer, my company’s team expected to describe how we develop primary care medical homes that become platforms for managing comprehensive health care clinical and financial risk. But the team on the other end of the phone beat us to it. Their remarks – that health care cost is a multi-headed monster that requires a broad array of simultaneously executed approaches – were a breath of fresh air.

They wanted to avoid approaches that don’t work or are designed to accrue to a vendor’s disproportionate financial advantage, and focus instead on mechanisms that measurably improve health and reduce cost. Their conventional current clinic vendor wasn’t onboard, philosophically or in terms of capabilities, and so wasn’t getting results. They were looking for a replacement vendor that could help them drive more appropriate care, with clear rules for patients and providers.

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