Congress’ Drug Addiction

Posted 2/26/16 on Employee Benefit News.

The Congressional committee that recently demanded Martin Shkreli’s appearance must have hoped to spotlight a smug jerk responsible for the outrageous prescription drug pricing that we’re all up against. Of course there are lots of Shkrelis running drug companies, but most are shrewder and less brash, and might not make for such good theater.

Rep. Elijah Cummings (D-MD), one of the Committee’s questioners, seemed to think that his witness could move healthcare forward by disclosing the machinery of the drug sector’s excesses. “The way I see it, you could go down in history as the poster boy for greedy drug company executives or you could change the system. Yeah, you.” Continue reading “Congress’ Drug Addiction”

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.”

Continue reading “Why Does The FDA Approve Cancer Drugs That Don’t Work”

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.

Continue reading “Will Specialty Drug Pricing Be The Straw?”

How Business Can Save America from Health Care

Brian Klepper

Published 6/09/14 in Employee Benefit News

ALP_H_BK_0010One of America’s most enduring mysteries is why the organizations that pay for most health care don’t work together to force better value from the health care industry.

We pay double for health care what our competitors in other developed nations do, but studies show that more than half of our annual health care spend – equal to 9% of GDP or our 2012 budget deficit – provides zero value. Every health care sector has devised mechanisms that allow it to extract much more money than it is legitimately entitled to. Health plans contract for and pass through the costs of products and services at high multiples of what any volume-based purchaser can buy them for in the market. Medical societies campaign for excessive medical service values that Medicare and commercial payers base their payments on. Hospitals routinely over-treat and have egregious unit pricing. There are scores of examples.

Decades of these behaviors have made health care cost growth the most serious threat to America’s national economic security. Medicare and Medicaid cost growth remains the primary driver of federal budget deficits. Over the past decade, 79% of the growth in household income has been absorbed by health care. Health care’s relentless demand for an ever-increasing percentage of total resources compromises other critical economic needs, like education and infrastructure replenishment.

Health care costs have been particularly corrosive to business competitiveness. Three-fourths of CFOs now report that health care cost is their most serious business concern. Commercial health plan premiums have grown almost five times overall inflation over the past 14 years. Businesses in international markets must overcome a 9+ percent health care cost disadvantage, just to be on a level playing field with their competitors in Australia, Korea or Germany.

The health care industry’s efforts to maximize revenues have been strengthened by its lobby, which spins health policy to favor its interests. In 2009, as the Affordable Care Act was formulated, health care organizations fielded eight lobbyists for every Congressional representative, providing an unprecedented $1.2 billion in campaign contributions to Congress in exchange for influence over the shape of the law. These activities go on continuously behind the scenes and ensure that nearly every health care law and rule is structured to the industry’s advantage and at the expense of the common interest.

Health care is now America’s largest and most influential industry, consuming almost one dollar in five. Only one group is more powerful, and that’s everyone else. Only if America’s non-health care business community mobilizes on this problem, becoming a counterweight to the health care industry’s influence over markets and policy, can we bring health care back to rights.

In every community, employers represent loose groupings of lives covered by health benefits, each with different approaches and results on health outcomes and cost. There are few standards and divergent opinions – mostly based on ideology rather than evidence – on plan structure, service offerings, cost sharing, incentives and many other variables.

Business health coalitions represent the opportunity for health care purchasers to collaborate and become more consistent. They can move collectively toward best practice and market-based leverage, with better health outcomes at lower cost. Coalitions like those in Savannah, Ga.  and Madison, Wisc., have shown impressive, measurable impacts. Many others could benefit from shared access to advanced risk management capabilities that can change how benefits and health care work.

Another critical missing component has been the direct involvement of business leaders. Many senior executives may not fully appreciate health care’s often blatant inappropriateness, and possibly haven’t thought through the scale of financial impact on their own businesses and the larger economy.

It will take businesses collaborating, harnessing their immense purchasing power, to disrupt health care’s institutionalized mechanisms of excess. By leveraging their collective strength, purchasers can convey that health care profiteering will no longer be tolerated, and that America’s economic success is dependent on the right care at much fairer pricing.

These goals are worth pursuing for our employees and their families, our businesses and the country. And we call on America’s employers to join us.

Brian Klepper, PhD, is chief executive officer, National Business Coalition on Health, a non-profit membership organization of purchaser-led business and health coalitions, representing over 7,000 employers and 35 million employees and their dependents across the United States.

Getting Beyond Fee-For-Service

Brian Klepper

Posted 12/02/13 on Medscape Connect’s Care and Cost Blog

ALP_H_BK_0010The catchy title of a recent Harvard Business Review Blog post, The Big Barrier To High Value Health Care: Destructive Self-Interest, suggested that the Institute for Healthcare Improvement (IHI) is forging arrangements that can overcome fee-for-service reimbursement’s propensity to drive excess. As the honest broker, IHI could advocate for arrangements of mutual self-interest based on the right care, better outcomes and less money. Employers and unions would get lower costs, with improved health and productivity. Health systems and health plans would win more market share (at their competitors’ expense), realizing longer term relationships that could facilitate sustainability as market forces intensify.

The substance of IHI’s description was less satisfying, though. Their principles – common goals, trust, new business models, and defining roles for competition and cooperation – are obvious ingredients in any workable business arrangement. But the authors never talked about the money. That left plenty of room for skepticism by those of us who have heard more than one CFO ask, “Why should we take less money until we have to?” What, exactly, is the incentive for health care organizations to moderate their care and cost patterns?

Continue reading “Getting Beyond Fee-For-Service”

Facilitating Interoperability

October 18th, 2013

Cross-Posted 10/18/13 from The Health Affairs Blog

BK 711Health Affairs report on health information interoperability by staffers of the Office of the National Coordinator for Health Information Technology (ONC) provides a good enough summary of the situation. But it also is not news, and falls under the Bob Dylan Rule: You don’t need a weatherman to know which way the wind blows. From the article: “In general, limited interoperability across vendors, low motivation to share information in a fee-for-service payment environment, and the high cost of interfaces remain substantial barriers to widespread health information sharing.”

Two difficult but solvable structural problems block our exchange of health care information. The first is the “transport protocol.” Most health care data transport approaches lack the strong privacy and security safeguards that other industries now consider essential. The same industry that is moving toward clinical applications of mobile health, genomics, and nanotechnology still primarily relies on cumbersome, expensive faxes to transmit clinical information between organizations.

Continue reading “Facilitating Interoperability”

A Better Way To Manage Care and Cost

Brian Klepper

http://boards.medscape.com/forums?128@864.cQ5Savfkkqo@.2a59c1b3!comment=1 

Posted 10/10/12 on Medscape Connect’s Care & Cost Blog

When an employer sits down with his health care partners – broker, health plan, physician, hospital, drug and device firm, health IT firm – everyone but him wants health care to cost more, and each is typically in a position to make that happen.

Lynn Jennings, CEO, WeCare TLC 

ALP_H_BK_0010A new class of health care management organization is emerging that thrives by taking advantage of health care’s rampant and institutionalized waste. These firms mine the market dysfunction that has developed over decades, which will almost certainly yield enough fuel to drive a new way to manage care and cost.

The founders of these organizations have deep health care experience, and they understand the mechanisms of excess. More important, the ones I’ve met are mission-driven, with a deep sense of outrage that health care’s exploitation has become so pervasive and overt. So their businesses are purposeful.

Continue reading “A Better Way To Manage Care and Cost”