Will the Pace of Innovative Change Overtake the Financial Imperative to Slash Spending?

Robert Laszewski

Posted 3/08/12 on Health Policy and Marketplace Review

I thought it was worth passing along the comments by Jim Tallon, president of New York’s United Hospital Fund, in a recent post.

Tallon reflected on an international meeting he attended with health care leaders from a number of industrial nations–“nations whose health care systems, indeed underlying philosophies, ranged from market orientation through hybrids to government authority:”

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PhRMa’s Free Ride in Health Care Reform

Dan Munro

Posted 3/05/12 on Forbes

You may recall that last year the DOJ agreed to a settlement with Google for $500 million. Basically Larry Page needed to avoid criminal prosecution for actively helping Canadian Pharmacies advertise to American consumers more effectively with Google AdWords.  That alone probably wouldn’t have raised any eyebrows except that the profits were being siphoned away from American pharmaceutical companies (at scale) and of course that simply can’t be allowed to happen.  Pure speculation on my part to say that pharma lobbying helped, but in either case, the DOJ filed criminal charges which forced the settlement. Open and shut case – now closed.  But here’s the thing – it’s a story that keeps repeating itself – in not so nuanced ways.  This time the thread starts with a fairly safe and upbeat report from our Nations largest e-prescribing network – Surescripts. Aptly titled: E-Prescribing Shown to Improve Outcomes and Save Healthcare System Billions of Dollars. Fabulous news. Let’s dive in.

So it turns out that the first bit of news isn’t that good.  According to the World Health Organization “as many as 50% of patients do not adhere fully to their medication treatment, leading to 125,000 premature deaths and $290B annually in the form of increased hospitalizations and costly complications (U.S. only).” Ok – so that’s not good at all.  It’s easy to dismiss the data (it’s from 2003) but still – 50%? According to Kaiser Permanente there were about 3.7B prescriptions filled in the U.S. in 2010 for a total in retail sales of about $221B.  So, in effect, the healthcare costs of poor drug adherence exceeds the total retail sales of all drugs in this country ($290B vs. $221B). While those two numbers aren’t related – it’s safe to say that the cost of poor drug adherence trumps any incremental value we’re able to get through e-prescribing by a very wide margin. In effect, non-adherence accounts for almost 10% of our $3 trillion National Healthcare Expenditure (NHE).

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Connecting the Dots: How Anticompetitive Contracting Practices, Kickbacks, and Self-dealing by Hospital Group Purchasing Organizations (GPOs) Caused the U. S. Drug Shortage

Brian’s Note: This piece found its way to me yesterday and, with the author’s permission, I’m republishing it in its entirety. It is a very long but worthwhile read, mostly because it clarifies what we’re up against. Kudos to Ms. Earl and Mr. Zweig for having the courage and tenacity to document this.

Patricia Earl and Phillip L. Zweig

Authors Note: Because of widespread misinformation on the causes of this public health emergency and the extreme urgency of resolving it, we have written this paper in a timeline format. We thank Bill Bandy, retired CEO and founder of United Medical Supply, a Dallas-based medical supplies distribution firm, for his invaluable research assistance.

COPYRIGHT © 2012 by Patricia Earl and Phillip L. Zweig

Abstract:
Recent reports by the Department of Health and Human Services (HHS) Office of Planning and Evaluation (ASPE)1, the Food and Drug Administration (FDA)2 and other sources on the acute shortage of generic drugs have attributed the shortages to everything from raw materials shortages and manufacturing problems to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and FDA drug approval delays. Based on these analyses, President Obama on October 31 issued an Executive Order instructing the FDA to require manufacturers to notify the agency of impending shortages, to expedite regulatory reviews, and to increase staff in its drug shortages program.

In this white paper, the authors argue that these explanations, and President Obama’s Executive Order, miss the point entirely. These reasons are ancillary to the root causes of this crisis. In fact, it is the direct result of the anticompetitive, exclusionary contracting practices, self-dealing, collusion, kickbacks and conflicts of interests of giant hospital group purchasing organizations (GPOs), which have undermined free market competition in drugs, medical devices, and supplies in the U. S. These purchasing cartels, which contract for $200 billion+ in hospital goods each year for about 5,000 non-profit, acute care hospitals, have rigged this market in favor of a handful of dominant suppliers and distributors, thereby making it unprofitable for other companies to make or sell these inexpensive, hard-to-manufacture drugs.

Continue reading “Connecting the Dots: How Anticompetitive Contracting Practices, Kickbacks, and Self-dealing by Hospital Group Purchasing Organizations (GPOs) Caused the U. S. Drug Shortage”

Trusting Government: A Tale of Two Federal Advisory Groups

David C. Kibbe and Brian Klepper

Posted 2/2/12 on the Health Affairs Blog

©2012 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.

Americans increasingly distrust what they perceive as poorly run and conflicted government. Yet rarely can we see far enough inside the federal apparatus to examine what works and what doesn’t, or to inspect how good and bad decisions come to pass. Comparing the behaviors of two influential federal advisory bodies provides valuable lessons about how the mechanisms that drive government decisions can instill or diminish public trust.

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Medicare Spending Time Bomb

Tom Emerick

Posted 1/23/12 on Cracking Health Costs

A huge amount of attention is focused on the national debt, and it should be.  The real train wreck in the pipeline is Medicare and Medicaid spending.

According to CBO projections, “Total spending on health care would rise from 16 percent of gross domestic product (GDP) in 2007 to 25 percent in 2025, 37 percent in 2050, and 49 percent in 2082.”  Click here for full report.  One problem with CBO estimates is they are notoriously optimistic, with actual costs coming in sometimes as much as eight times higher than CBO projections.

Sometime between 2025 and 2050, America’s going to…. Oh well, I’ll let you complete the sentence.

To quote Alan S. Blinder from a WSJ editorial on this topic, “So no, America, we don’t have a generalized overspending problem for the long run. We have a humongous health-care problem.”

Our children and grandchildren will resent our generation, perhaps bitterly, if we let this stand. In time historians will puzzle over why we knew this was coming but failed to act.

A Theory on Why The FDA Hid Conflicts of Interest

Merrill Goozner

Posted 1/13/11 on Gooz News

Much has been made of Health and Human Services Secretary Kathleen Sebelius’ decision last month to overrule Food and Drug Administration scientists and prohibit the over-the-counter sale of themorning after pill to minors. Many observers blasted the move as a blatant political move by the White House, which didn’t want to antagonize social conservatives ahead of this year’s election.

Now there is the possibility politicians on Capitol Hill are also influencing some choices being made at the FDA. It involves the agency’s decision last month to appoint at least three scientists to a high-profile drug safety advisory committee without disclosing they had conflicts of interest with the company – Bayer – whose product – birth control pills – was up for review.

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Conflict-Free Panels Are Possible and Necessary

Merrill Goozner

Posted 11/3/11 on Gooz News

Duff Wilson of the New York Times this morning puts the spotlight on three National Institutes of Health panels deliberating new clinical practice guidelines for managing cholesterol, hypertension and obesity and finds significant conflicts of interest among the panel members. No surprise there. Most guideline-writing committees in most specialties across the medical profession are laced with physicians on the payrolls of companies with a financial stake in the final product of the committees’ deliberations. Just put the phrase “conflicts of interest” in the search engine on this website, and you’ll see more than 200 articles I’ve written in the past few years documenting and lamenting this phenomenon.

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