Category: Supply Chain

Barking Up the Wrong Tree: Affordability, Not Cost Growth, Is The Real Policy Challenge

Jeff Goldsmith

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” →

The GOP Budget, Fiscal Responsibility and Part D

Joe Paduda

Posted 4/06/12 on Managed Care Matters

Rep. Paul Ryan (R WI) and the House Republicans are touting their budget as fiscally responsible and prudent. What Mr Ryan conveniently forgets, or more likely avoids, is this:

Eight short years ago he – and his GOP buddies – passed the single largest entitlement program since Medicare – the Medicare Part D drug benefit – with no dedicated financing, no offsets and no revenue-generators – the entire future cost –which is now around sixteen trillion dollars [see page 148] – simply added to the federal budget deficit.

According to Bruce Bartlett writing in the Fiscal Times, “By 2030, Part D alone will cost taxpayers 1 percent of GDP.”

Continue reading “The GOP Budget, Fiscal Responsibility and Part D” →

The Right Rx for Better Health Care: Rise Up to Challenge the Industry’s Lobbying Power

Brian Klepper and Shannon Brownlee

Published 3/29/12 in the New York Daily News

Obamacare had its days in the Supreme Court this week, and the justices’ decision could have sweeping consequences for the individual mandate provision in the Patient Protection and Affordable Care Act, and maybe even for the fate of the law itself.

Yet whatever the court decides, we will still be stuck with a problem that this contentious law was not likely to solve on its own: an out of control health care industry that threatens the stability of the U.S. economy and the federal government’s ability to deal with our long-term debt.

Continue reading “The Right Rx for Better Health Care: Rise Up to Challenge the Industry’s Lobbying Power” →

Another Stent Device Biting The Dust

Tom Emerick

Posted 3/26/12 on Cracking Health Costs

We’re seeing a trend.  The FDA approves a stent without proper testing.  Death and complication rates with the new stent increase, the FDA is force to review it.

Remember the controversy over drug eluding stents?

According to an article in the WSJ by Thomas Burton, the so-called Stryker stent…aka the Wingspan device… is increasing rates of  death of patients who have received them.  Following protocol a panel has been convened.  According to the WSJ article, “The FDA had asked the outside panel to advise it on what to do in the wake of a large study last year showing more strokes and deaths in patients with the Wingspan device than among those whose condition was treated using drugs.”

Further, “Researchers in the study concluded the rate of stroke in the patients who got the Wingspan device was ‘substantially higher than the rates previously reported
with the use of the Wingspan stent.’ ”

This is yet another reason for patients to be cautious in agreeing to a stent, and another reason employers need to consider favoring clinics who practise strict evidence-based medicine constructs.

Superconsumers and Value Mining: Health Care’s Uber-Trends Driving Care, Everywhere

Jane Sarasohn-Kahn

There’s a shift in power in health care moving away from providers and suppliers like pharma and medical device companies, toward patients and payers. This is the new health world according to Ernst & Young‘s latest Progressions report called, The third place: health care everywhere.

What’s underneath this tectonic shift is the need to bend that stubborn cost curve and address public health outcomes through behavior change. E&Y says look for new entrants, like retailers, IT companies, and telecomms, to be part of the solution beyond traditional health care stakeholders. These participants will be part of both delivery of care services and play an ever-important and -growing role in “value mining,” which E&Y defines as the use of data mining to determine the value of health interventions. THINK: comparative effectiveness through a lens of value-for-money and you get the picture.

Continue reading “Superconsumers and Value Mining: Health Care’s Uber-Trends Driving Care, Everywhere” →

MedShare – Recycling Medical Supplies for the Good of the World

Patricia Salber

Posted 3/06/12 on The Doctor Weighs In

This post was inspired by Kathryn Johnson, Western Regional Council Member of  MedShare, a friend, and a most wonderful connector of people.

Today, I drove over to San Leandro, California, the San Francisco Bay Area town where I went to high school.  I wasn’t there to reminisce, however.  I was there to visit one of the most innovative medical charities in the country, MedShare.

MedShare’s Western Region Executive Director, Chuck Haupt welcomed a small group of visitors to MedShare’s 32,000 square foot West Coast facility by framing the need that the charitable organization is meeting.   He showed us a video of the birth and death of a baby born to an HIV positive mom in Lesotho (Southern Africa).  The baby was born limp and in respiratory distress.  In the US, a newborn like this would have been rushed to the neonatal ICU (NICU), intubated, placed on a respirator and then be expertly cared for by a highly trained medical team, with a NICU nurse devoted just to her.  This Lesotho baby was rushed to a nurse already caring for seven other sick babies who were receiving oxygen from a jerry-rigged device that allowed oxygen from a single tank to be shared with other babies in distress.  This newborn died because there was not enough tubing to share the O2 with an eighth.

Continue reading “MedShare – Recycling Medical Supplies for the Good of the World” →

The Fiction Behind the Cost of New Drugs

Merrill Goozner

Published 2/16/12 in The Fiscal Times

The drug industry usually defends the high price on drugs – the latest cancer therapies are tipping the scales at $100,000 a year – by pointing to the large sums it spends on research and development. It is true that drug firms spend alarger share of their revenue on R&D than most other industries, typically anywhere from 15 to 20 percent of sales. And Eli Lilly ran a Super Bowl ad claiming the cost of developing a new drug has now risen to more than $1.3 billion.

Continue reading “The Fiction Behind the Cost of New Drugs” →

It’s 2012. Let’s Recap

Tom Emerick

Posted 1/02/11 on Cracking Health Costs

Let’s hit a few highlights of 2011.  In Cracking Health Costs we described certain…um…scary trends in health care in the US:

  • US spending on health care is lapping our peer countries while our life expectancy is declining comparatively.  This is a major drain on our economy and is costing us jobs.
  • We have a huge amount of unnecessary surgery and testing.  It’s getting worse, not better.  (Read The Treatment Trap by Rosemary Gibson and Janardan Prasad Singh for real life examples.)
  • Continue reading “It’s 2012. Let’s Recap” →

The Latest Advisory Committee at FDA

Merrill Goozner

Posted 12/7/11 on Gooz News

Is the Food and Drug Administration stacking the deck against a negative decision at tomorrow’s safety hearing for oral contraceptives that contain drospirenone, include Bayer’s Yasmin? Or is it laying the groundwork to combat lawsuits by Bayer should the agency decide to pull the drug, which the FDA has already warned increases the risk of blood clots?

The agency took two actions this week sure to anger safety advocates, especially in the women’s health community. First, it ruled that Public Citizen’s Sidney Wolfe could not take his usual post as consumer representative on the Drug Safety Advisory Committee because his widely read newsletter, “Best Pills, Worst Pills,” has already called for pulling Yasmin from the market. The agency accused Dr. Wolfe of an intellectual conflict-of-interest.

Continue reading “The Latest Advisory Committee at FDA” →

Ending Pay-For-Delay Deals Could Raise over $5 Billion

Merrill Goozner

Posted 11/08/11 on Gooz News

The deficit reduction “super committee” charged with coming up with $1.2 trillion in budget reductions over the next decade shouldn’t let this one pass. The Congressional Budget Office today estimated that ending drug industry “pay for delay” deals with generic manufacturers will save the federal government over $5 billion over the next decade.

The “Preserve Access to Affordable Generics Act,” sponsored Sen. Herb Kohl, D-Wis., with eight co-sponsors, including two Republicans, requires that any deal between two companies that delays production of a generic drug after a patent has expired must show that the deal is “pro competitive,” which would effectively ban the practice. The Federal Trade Commission issued a report a year ago that found 66 of these deals reached over the past half decade were costing consumers about $3.5 billion a year.

Continue reading “Ending Pay-For-Delay Deals Could Raise over $5 Billion” →

Buck for the Bang: Premium Med-Tech Pricing

Adi Renbaum

Posted 10/31/11 on Medical Device Daily.

Cook Medical’s Zilver PTX is likely to become the first peripheral drug-eluting stent (DES) to be approved in the U.S., after an FDA advisory panel voted unanimously in favor of the device on Oct. 13. Approval would give the sponsor, Cook Medical (Bloomington, Indiana) access to a peripheral arterial disease (PAD) market valued at $1 billion, depending on whose figures one relies.

I attended the Oct. 13 advisory committee hearing for the device and observed the panel members comment that this was among the best submissions they had seen in some time. Cook presented a clear study that met all primary endpoints and showed improvement over percutaneous transluminal angioplasty, the current standard of care. To non-FDA experts like myself, it seemed as though Cook was recognized for setting a new bar for conducting clinical trials and collaborating with the FDA.

I imagine that Cook Medical’s leadership was able to make all the right clinical trial investments necessary for the long-term viability of the product’s market value, not just the ones that were on display at the advisory panel meeting.

Continue reading “Buck for the Bang: Premium Med-Tech Pricing” →

What Happens in Atlantic City…Gets Reported Here

Paul Levy

Posted 10/13/11 on Not Running a Hospital 

I just returned from giving a keynote address at the Annual Institute of the New Jersey and Metropolitan Philadelphia Chapters of the Healthcare Financial Management Association.  Regular readers of this blog will not be surprised at the themes I covered (transparency, front-line driven process improvement, the virtuous cycle between reducing harm and financial efficiency), and I need not elaborate on them here.

Continue reading “What Happens in Atlantic City…Gets Reported Here” →

The Great Finesse in Health Reform- Changing The Language

Richard Reece

Posted 10/13/11 on MedInnovations Blog

One man’s words are another man’s poison.

Anonymous

We were reasonably calculating in our approach. We consciously began using the language of the marketplace, rather than the language of medicine. We began talking in terms of “providers and consumers” instead of “doctors and patients,” for example. This, of course, was and still is highly offensive to many people in medicine, and we felt the old language was almost like the language of religion, and, thus, harder to use when trying to affect widespread change.

Paul Ellwood, MD, 1985, “Life on the Cutting Edge,“ Twin Cities Magazine, 1985

1n 1988 in Who Shall Care for The Sick: The Corporate Transformation of Medicine in Minnesota, I said that words matter in health reform, that use of “providers and consumers” signaled a transformation in American medicine, and that these words a “Grand Finesse” of American physicians, effectively distracting them from what was really happening.

I predicted physicians would become serfs of payers, physicians would be disillusioned , and ultimately, a doctor shortage would ensue.

Continue reading “The Great Finesse in Health Reform- Changing The Language” →

Less is More: Top-Performing Hospitals Spend Less on Pharmacy and Supplies

Jane Sarasohn-Kahn

First posted 9/11/11 on Health Populi

The Top 100 performing hospitals in the U.S. spend 13% less on supply costs and 6% less on pharmacy costs, according to a research brief fromThomson Reuters, Associations Between Supply and Pharmacy Service Intensity, System Membership, and Hospital Performance.

Lower pharmacy intensity translated into lower inpatient and post-discharged mortality, and reduced complications, in the high-performing hospitals. Furthermore, these hospitals had better safety records, and shorter lengths-of-stay.

Continue reading “Less is More: Top-Performing Hospitals Spend Less on Pharmacy and Supplies” →

U.S. Hospitals Face Gloomiest Economic Outlook in 20 Years

Jane Sarasohn-Kahn

First posted 9/08/11 on Health Populi

Revenues = volume x price. This is the financial reality for every organization that makes its money serving customers, whether for-profit or not-for-profit.

For the U.S. hospital sector, both volumes and prices are falling, leading to a depressed top-line. Reimbursement reductions from Medicare, Medicaid and commercial health plans are all under pressure: that’s the ‘price’ part of the equation. On the volume multiplier, the recession economy has caused patients to delay care, such as elective surgeries. Hospitals are forced to scrutinize every aspect of operations, according to Hospital Revenues in Critical Condition; Downgrades May Follow, from Moody’s Investors Service.

Continue reading “U.S. Hospitals Face Gloomiest Economic Outlook in 20 Years” →