by ACHE SoCal | Nov 3, 2015 | Blog
Prescription drugs are the fastest growing component of health care spending, to be sure. But don’t go slamming Big Pharma for boosting health care costs in the U.S. Arguably, the deployment of meds to control the harmful effects of medical maladies does more to defray the use of more costly interventions than anything else we do in health care. But do those slick drug ads that dominate prime time, late night and just about all other time slots on radio and television help or hinder this purpose? Moreover, do they work? That is, does marketing drugs directly to patients boost sales for drug companies? “Yes,” regarding the latter, “and really well, too,” I hasten to add.
The results of a survey conducted by the Kaiser Family Foundation (KFF) suggest that consumers rush to their doctors for access to media-hawked meds, notwithstanding all the potential and scary side effects the Food and Drug Administration require drug companies to include in their ads. In fact, those drugs that may cause depression, cancer, strokes, heart attacks and that may lead to suicide or death are the more sought after offerings. Go figure? Anyway, the KFF summarized the results of its survey as follows:
“A large majority of Americans (82 percent) report seeing or hearing prescription drug ads, with about 3 in 10 (28 percent) saying they have talked with a doctor about a specific medicine as a result of an ad. About half of the public (51 percent) say they think that prescription drug advertising is mostly a good thing and many say drug advertisements do a good or excellent job of telling consumers which condition or disease the drug is designed to treat (50 percent), as well as the potential benefits (47 percent) and potential side effects they might experience (44 percent).”
More importantly, of the 28 percent who asked their doctors about a drug marketed on the radio or in a television ad, 12 percent said they were given a script for it. I’m not that good at math, but what that means is that direct-to-consumer marketing by Big Pharma companies yields about one new customer for every 30 listeners/viewers their ads reach. And when you factor in that the ads reach 82 percent of the adult population in their media markets… not a bad investment, yes?
Does this Rx marketing strategy counter efforts to constrain the growth in health care costs? I don’t know if it helps, but I don’t believe it adds to the problem in a material way either.
In 2013, prescription drugs accounted for 9.3 percent of all health care costs in the U.S.—nearly 12 percent for the Medicare program— and though considerable, clearly not the big ticket cost item in health care spending.
The prevalence of chronic disease in the population is the biggest, single factor driving costs higher in our rapidly expanding and aging U.S. population. Fifteen percent (15%) of all Medicare beneficiaries are afflicted with three or more chronic medical conditions and, as a result, drive almost 75 percent of that program’s total spending.
When the prevalence of chronic disease grows in a population, that means our prevention, health education, health promotion and risk reduction efforts are failing or have failed. What’s left to do then is to effectively manage the chronic diseases of the afflicted, and that’s what prescription meds do best by curing or keeping chronic diseases from worsening, thereby avoiding more costly forays into our acute care treatment arena. In fact, for every one percent increase in the prevalence of chronic disease, there is a corresponding six percent increase in medical care service consumption. Again, that circumstance is the leading cause behind our high rate of growth in health care costs.
by ACHE SoCal | Sep 8, 2015 | Blog
“California’s hospital emergency rooms are becoming increasingly crowded with mentally ill and often disruptive patients, partly the result of inadequate mental healthcare and sometimes injudiciously written ‘5150 holds.’ Acute care facilities lacking psychiatric beds sometimes have to hold these patients for days, at significant expense. Medi-Cal reimbursement for psychiatric patients is inadequate; compensation for uninsured patients is all but non-existent. The move toward involuntary outpatient treatment shows some promise, but its funding has often been uneven. Chronically understaffed and underfunded rural counties are unlikely, if ever, to implement such comprehensive reforms. Many medical providers consider it a single step in a gradual reform that may never completely occur.”
This was the opening paragraph of a white paper and blog I wrote on this subject seven years ago. Sadly, the problem has only worsened since then, and it was then and now a vital nationwide public policy issue.
To be sure, the problem is not confined to hospitals serving densely populated urban communities, witness the plea of a nurse executive from a hospital in Santa Barbara who prodded me to write more about this issue. It was, though, a letter published in Health Affairs from a CEO of small-town hospital in rural North Carolina that moved me to revisit this issue.
“I am challenged daily—as are my staff members—by the broken mental health services in our state,” the CEO says. “Our emergency department has become by political default the local crisis center that is used to meet the socioeconomic demands of our times. In our society today people with mental illness seem to live on an island, surrounded by an ocean of indifference.
“Since our hospital has no psychiatric inpatient unit, it is common to have three to five mental health patients waiting a week or more in an emergency department treatment room that is ten feet by ten feet. The patients wait in shackles and chains for transport by the local sheriff to a state facility.”
“Many of these poor souls have lost their job, home, family, and pride. Saddest of all, they have lost hope. These neglected members of society are perpetually cycled from our emergency department to a psychiatric facility and back again. Thirty to sixty days after leaving us, they return—usually because of noncompliance with their medications, which is related to their inability to afford the drugs or to understand the need for them.”
Here’s is the situation we’re in:
Slightly more than 1 in 4 adults in the U.S. suffer from a diagnosable mental disorder in any given year. Moreover, about 1 in 17 suffer from a serious mental illness, but a third or more of them receive little-to-no treatment except for when they are forcibly brought to our nation’s hospital emergency rooms because they have acted out in ways that deem these neglected souls to be a harmful threat to themselves or others.
Here are the solutions:
Medicaid payments must be increased to cover the actual cost for hospitalizing these poor souls who are forcibly brought into hospital emergency rooms for treatment of their mental disorders. In California, hospitals receive slightly more than half of their actual costs for treating this population, resulting in the closure of more and more acute care psychiatric units. This decline and any increase in capacity will happen if and only if payment for treating poor patients is increased.
Moreover, and perhaps most importantly, a legislator or legislators in California must step up to the plate and own this issue, much like the late state senators Lanterman and Petris of decades gone by did. And I would suggest that a good place to start would be with a review of Laura’s Law that wasenacted 14 years ago but is in desperate need of a champion who will bridge the concerns of consumer advocates and providers of health care for the mentally ill.
I hasten to add that the enactment of federal Affordable Care Act in 2010 did little to address this problem, as the CEO from North Carolina went on to say, “These people have no guardian angel to provide them with person-centered care, and in the public arena they have no voice and no vote. Our society’s treatment of them is unforgivable.”
by ACHE SoCal | Aug 3, 2015 | Blog
Is it just me or did the pace of health plan mergers and consolidations move into a higher gear in recent weeks? Anthem is courting Cigna, and Cigna is sweet on Humana. Centene Corp and Health Net announced their betrothal, and Aetna executives disclosed their affection for United Health. On the provider side, the Providence Health and Services and St. Joseph Health marriage announcement dominated the industry news cycle during the last week of July. So, what’s going on?
According to my economist friends, this type of activity is a normal response in diverse markets when strategies to abate unbridled cost inflation threaten bottom lines and market share. The result is the formation of oligopsonies or oligopolies to transform and stabilize such markets. What is happening with the health care industry, though, is different because both trends are occurring simultaneously and at sprint levels, as both buyers (payers) and sellers (providers) seek to strengthen their market positions through consolidation.
To be sure, the health care industry is headed towards an uncertain but radical new future. Our current delivery and financing model will not constrain the growth of health care costs that almost everyone believes is needed. At 5.8 percent –more than double our overall inflation rate– the latest projection indicates that the rise in annual spending on health care has returned to pre-recession (2007) levels and that the percentage of our gross domestic product it consumes will reach 20 percent by 2024. The ever-increasing consumption demands of an aging population all but guarantee this outcome. Over time, these market forces will drive out marginal players, as government officials seek to tame Medicare cost growth with debilitating payment cuts and reform strategies. And, as Medicare goes, so go other market segments. So, if a current player wants to be part of the new health care paradigm, whatever that is, that player must avoid being marginalized during this reboot of the system.
Many industry analysts assert that this consolidation trend serves to retard the evolution of the change needed by creating giants with the power to leverage pricing in the marketplace; that is, the amalgamation of market resources insures that the unsustainable rise in health care spending continues. To that point, a prominent health care executive and mentor provided the following lament: “Our health care markets are driven by supply, demand and two other forces; fear and greed. That makes what’s right to do a lot harder.”
by ACHE SoCal | Jun 29, 2015 | Blog
It was hard to get on the front page with important news during the last two weeks of June. The Confederate flag controversy, the hunt across several states for two prison escapees and the U.S. Supreme Court decisions on same-sex marriage, fair housing and Obamacare dominated all things media. I’m sure you missed it, but UCLA released an important study during that time as well. It seems that we Americans are just getting fatter and fatter. According to the study, during the first decade of the 21st century, the number of adult Californians who are obese –not just overweight– but obese, grew from one-in-five to one-in-four. This circumstance is even worse nationally, with 28 percent of U.S. adult residents now being obese.
As a reminder, adults with a body mass index (BMI) of 25 or greater are considered overweight; those with a BMI of 30 or more are considered obese. And obesity is the cause of many serious chronic diseases and fatal conditions; e.g., heart attacks, strokes, cancer, diabetes and more.
The impact of obesity on population health is bad enough, but the cost to consumers and our nation’s economy is even worse. At the current rate of inflation, the percentage of our gross domestic product (GDP) spent on health care is expected to rise from about 17.4 today to 25 by 2025. This unhealthy expansion to our beltlines will guarantee the achievement of this unhealthy expansion to our GDP.
Here is how the math works. Obesity increases the incidence and prevalence of chronic diseases. Every one percent increase in the incidence of chronic disease drives a six percent increase in the consumption –and cost– of medical services.
Moreover, the population between ages 15-64 with three or more chronic conditions accounts for half of all medical expenditures for that age cohort. For seniors on Medicare, the 15 percent with three or more chronic conditions drive a full 75 percent of all Medicare program spending.
To be sure, we went from one-in-five to one-in-four adults achieving obesity status during the first decade of this century. How about 1-in-3 by the end of this decade? How would that work?
Here is my proposal for addressing this weighty problem. All health plans or employers should give a body monitor (e.g., Fitbit, Withings, Nike, etc.) to each insured adult with a BMI over 25; that is, a monitor with a cloud connection to record all daily physical activity. Those who fail to meet certain activity or BMI reduction targets should be required to pay a larger share of their health insurance premium costs. This is the agreementI have with my health plan, and it does motivate me to watch what I eat and move more. I’m cranky as hell, but I am dropping unhealthy fat! What will you do to lose your excess pounds?
by ACHE SoCal | Jun 8, 2015 | Blog
When asked recently what worries him the most, Microsoft founder and billionaire philanthropist Bill Gates without hesitation qualified super-resistant, killer microorganisms as the number one threat to humankind and his chief worry. Without question, a number of viral, bacterial, fungal and parasitical organisms exist today that could wipe out the populations of entire regions and become a pandemic threat to human life around the globe. Gates worries because the control systems we have in place are inadequate, and the organizations entrusted with protecting us against the world’s deadly microbes are underfunded and clumsy about doing their work. (Even the World Health Organization agreed that it moved too slowly to tackle and arrest the latest EBOLA outbreak in West Africa.)
That is a problem for world leaders to address, but our nation’s leaders need to engage more actively in our own homegrown and losing battle against superbugs. Specifically, we must rapidly overhaul our national policies regarding the overuse of antibiotics.
According to the Centers for Disease Control, more than two million U.S. residents fall ill to antibiotic-resistant bacteria, and nearly 23,000 of these victims die each year. Add the explosion of multi-resistant diseases like tuberculosis in other parts of the world and the likelihood of their migration to the U.S. and this crisis looms large.
The overuse and misuse of antibiotics are what causes the organisms they combat to develop resistance, and that’s happening at a hastened pace. In fact, over half of all doses consumed by Americans are inappropriate or unnecessary as prescribed. Overprescribing is a problem, to be sure, but direct-to-human sales of antibiotics makes up only about 20 percent of total sales in the U.S. Eighty percent is sold for consumption by livestock bred for human consumption. Gives a whole new meaning to the stale phrase, “You are what you eat,” doesn’t it?
The first serious legislative attempt to regulate the use of antibiotics in livestock was sponsored by Representative Louise Slaughter (D-NY) in 2007 with the introduction of the Preservation of Antibiotics for Medical Treatment Act (PAMTA). If it had been enacted, it would have phased out the non-therapeutic use of antibiotics in animal feed or water and prohibited the use of antibiotics in animals that are not sick or for disease prevention. The bill was killed by legislators who ignored the science and scientists and instead sided with the meat industry whose members want to continue to fatten their herds and flocks by pumping them with antibiotics mainly as a prophylactic against disease. Attempts to gain passage of the bill were defeated again in 2009, 2011 and 2013, each time due to the efforts of the meat lobby.
In the meantime, more costly antibiotic-free meat options are beginning to show up on supermarket shelves, and at least one poultry producer, Tyson Foods, has pledged to eliminate the use of antibiotics in its flocks by the Fall of 2017. That’s all well and good, but time is running out. Congress should pass a PAMTA law now. And while they’re at it, let’s supercharge all efforts to develop new antibiotics.
In the meantime, either reduce or eliminate your personal consumption of meat products. This issue notwithstanding, it’s probably something you ought to do to improve your health status anyway. Also, holler (JLottSr@me.com) if you would like to know where the best vegan restaurants can be found in Southern California. I belong to a network of vegan restaurant reviewers who can recommend a restaurant or two near you.
by ACHE SoCal | May 14, 2015 | Blog
My daughter fell ill recently with a persistent fever and a chronic headache that our home treatment efforts were not curing. So, my wife did what any responsible parent with employer-sponsored PPO insurance would do; she called our daughter’s pediatrician to see if she could get her seen later that afternoon. She was told that my daughter’s doctor was not seeing patients that day and that all the other pediatricians in his very large group practice were booked solid. Asked what we should do with our daughter, without hesitation the office clerk said, “Take her to the ER.”
“Wow!” I said to my wife when she reported this exchange. I continued with, “This is ridiculous! Expensive! Wasteful!” …and a few other choice (and unprintable) expletives. My daughter just got locked out of her so-called “medical home.” Upset, yes I am. Moreover, I cannot believe that this is how the ACA-inspired population health management initiative was intended to work, but I could be wrong? I often am.
It’s not that I am naïve about our health care industry practices. Mind you, I have been involved in health care policy development, advocacy, program planning and teaching for over 40 years. Further, I always tell my students that a key reason we don’t have the most efficient health care delivery system possible is because half the system shuts down on weekends and at 7:00 p.m. on weekdays. It is during these times when we insured consumers are set free to access, misuse, over-use and abuse the most expensive resources our system have to offer.
Our experience with my daughter is neither unique nor isolated. According to a poll released by the American College of Emergency Physicians (ACEP) earlier this month, three-quarters of the emergency room physicians from across our nation report that ER visits have surged since Obamacare took affect –the very opposite of what most analysts expected would happen. By contrast, fewer than half the doctors polled reported any increases during the year (2010) that the ACA was enacted but not yet implemented.
So, what have we done? We gave health care coverage to about 10 million uninsured Americans and put them in our inefficient, overburdened and overpromised delivery system.
Extending Medicaid coverage accounts for most of the newly-minted insured Americans, but it would seem that most of them are having a hard time finding a doctor who will treat them, much less a medical home to manage their overall health status. Over half the ER doctors polled by the ACEP report seeing a sharp spike in Medicaid patients using hospital emergency rooms for their primary care and chronic care needs.
Sure, increasing the paltry Medicaid payments to something closer to what the feds pay doctors to treat Medicare patients would help with this problem, but our government must also support initiatives to abate the severe shortage in primary care doctors their own analysts say looms large. Specifically, our physician shortage is expected to exceed 20,000 doctors by 2020, a little more than four years now. To mitigate this shortage, freshman classes starting next year in our nation’s 122 medical schools would have to either double in number or double in size, which is not likely to happen.
Greater minds than mine will address these problems. In the meantime I believe that every doctor who refers his or her patient to a hospital emergency room for primary or chronic disease care ought to be required to pay the difference between a physician office visit and the hospital’s emergency room allowable charges. Conversely, doctors should be rewarded for providing the access to the appropriate and cost-effective medical care their patients require. Operant conditioning to alter problem behaviors does work. Health plans…Are you listening?
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