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”

Would A Single Payer System Be Good For America?

Brian Klepper

ALP_H_BK_0010berwick_donOn Vox, the vivacious new topical news site, staffed in part by former writers at the Washington Post Wonk Blog, Sarah Kliff writes how Donald Berwick, MD, the recent former Administrator of the Centers for Medicare and Medicaid Services and the Founder of the prestigious Institute for Healthcare Improvement, has concluded that a single payer health system would answer many of the US’ health care woes. Dr. Berwick is running for Governor of Massachusetts and this is an important plank of his platform. Of course, it is easy to show that single payer systems in other developed nations provide comparable or better quality care at about half the cost that we do in the US.

All else being equal, I might be inclined to agree with Dr. Berwick’s assessment. But the US is special in two ways that make a single payer system unlikely to produce anything but even higher health care costs than we already have.

Continue reading “Would A Single Payer System Be Good For America?”

The RUC Is Bad Medicine: It Has To Go

Brian Klepper

Posted 8/12/13 on Medscape Business of Medicine

BK 711“One of the biggest mistakes we made … is that we took the RUC … back in 1992 and gave it to the AMA. … It’s incredibly political, and it’s just human nature…the specialists that spend more money and have more time have a bigger impact.”

This was Tom Scully, former Bush II Administrator of the Centers for Medicare and Medicaid Services (CMS), previously the Health Care Finance Administration (HCFA). He was a panelist in a May 10, 2012 Senate Finance Committee RoundTable discussion by former HCFA/CMS Administrators and has become one of the RUC’s most outspoken critics. He was explaining how the American Medical Association’s (AMA) Relative Value Scale Update Committee (RUC), a group that asked if it could help the government by overseeing a valuation process for medical services, came to dominate and distort the pricing used in Medicare, Medicaid and commercial health plans.

Mr. Scully echoed this sentiment recently.

“The idea that $100 billion in federal spending is based on fixed prices that go through an industry trade association in a process that is not open to the public is pretty wild. … Having the AMA run the process of fixing prices for Medicare was crazy from the beginning.”

Gail Wilensky, HCFA Administrator under Bush I, was wistful. “It happened innocently enough.”

It is remarkable and compelling to hear these federal health program ex-stewards express regret about a fiasco they had a hand in. Their “mea culpas” are almost palpable. Mr. Scully, in a recent Washington Post video interview, gave a quick aside, “It’s partially my fault.”

Continue reading “The RUC Is Bad Medicine: It Has To Go”

Hurtling Down the Road to Ruin

Brian Klepper and David C. Kibbe

Posted 6/21/13 on Medscape Internal Medicine

BK 711dckibbeA recent New York Times article that focused on colonoscopies highlighted the questionable science, predatory unit pricing, and overutilization that characterize this procedure and much of US healthcare. Patients get routine screenings that, in other industrialized countries, cost one half to one thirtieth of what they do here, then are gobsmacked by bills equivalent to the cost of a good used car. Reporters and healthcare writers have covered this topic in all its intricacies thousands of times.

But Elizabeth Rosenthal, the Times reporter, zeroed in on the root of the crisis, which is how healthcare interests have shaped market and policy forces to their own ends. “The high price paid for colonoscopies mostly results not from top-notch patient care, according to interviews with health care experts and economists, but from business plans seeking to maximize revenue; haggling between hospitals and insurers that have no relation to the actual costs of performing the procedure; and lobbying, marketing and turf battles among specialists that increase patient fees.”

One result is that healthcare’s cost drivers are a multiheaded monster, frustrating simplistic solutions. Many physicians own a financial stake in the care they deliver, rather than being paid to manage the care process well. Pricing is typically unrelated to cost or quality, varies wildly among providers, and often comprises dozens of components that are impossible to understand beforehand. Insurance companies may make a percentage of total cost and so are incentivized to allow healthcare to cost more. Every level of the system is rigged.

Why Only Business Can Save America From Health Care

Brian Klepper

Posted 3/24/13 on Medscape Connect’s Care and Cost Blog

BK 711For a large and growing number of us with meager or no coverage, health care is the ultimate “gotcha.” Events conspire, we receive care and then are on the hook for a car- or house-sized bill. There are few alternatives except going without or going broke.

Steven Brill’s recent Time cover story clearly detailed the predatory health care pricing that has been ruinous for many rank-and-file Americans. In Brill’s report, a key mechanism, the hospital chargemaster, with pricing “devoid of any calculation related to cost,” facilitated US health care’s rise to become the nation’s largest and wealthiest industry. His recommendations, like Medicare for all with price controls, seem sensible and compelling.

But efforts to implement Brill’s ideas, on their own, would likely fail, just as many others have, because he does not fully acknowledge the deeper roots of health care’s power. He does not adequately follow the money, question how the industry came to operate a core social function in such a self-interested fashion or pursue why it has been so difficult to dislodge its abuses. For that, we need to turn our attention to a far more intractable and frightening problem: lobbying and the capture of regulation that dictates how American health care works.

Continue reading “Why Only Business Can Save America From Health Care”

Arriving at the Beginning

Brian Klepper

Posted 11/12/12 on Medscape Connect’s Care & Cost Blog

The most striking aspect of the election was that it decisively clarified the philosophical preferences of most Americans. And because the outcome was largely determined by minorities, women, and the young, it appeared to be a much broader and more independently-minded vision than most pundits have given the electorate credit for. That unexpectedly portends big changes.

Peggy Noonan’s analysis in the Wall Street Journal quotes a brutal summation by conservative activist Heather Higgins:

A majority of the American people believe that the one good point about Republicans is they won’t raise taxes. However they also believe Republicans caused the economic mess in the first place and might do it again, cannot be trusted to care about cutting spending in a way that is remotely concerned about who it hurts, and are retrograde to the point of caricature on everything else.

Continue reading “Arriving at the Beginning”

Primary Care’s Dilemma

Brian Klepper

Posted 9/12/12 on Medscape Connect’s Care and Cost Blog

Early in the new documentary, Escape Fire, which provides detailed portraits of US health care’s craziness, we meet Erin Martin MD, a young primary care physician in The Dalles, OR, who ultimately abandons her practice with low income patients. Time and financial constraints have frustrated her efforts to provide the care she believes is necessary to make a difference in people’s lives. Later, we see her in a business meeting with other primary care physicians in her new practice, reviewing financials. To maintain the practice’s revenues, they’ll need to see more patients, which means shorter patient visits. The defeat is palpable to her, to her colleagues and to the audience.

A few days ago, Rob Lamberts MD, 18 years into his practice, announced on The Health Care Blog that he was dropping out, leaving to go solo in a Direct Primary Care (DPC) practice catering to patients who can pay out-of-pocket rather than through insurance. Dr. Lamberts, a regular and characteristically sunny columnist, is workmanlike but chilly in his explanation.

Continue reading “Primary Care’s Dilemma”