May 29, 2017

Where Do All the Dollars Go?

The editor-in-chief of one of my favorite health news sources, Kaiser Health News, recently published her first book—for over twenty years she has been a journalist at the New York Times—and it’s an important one. An American Sickness: How Healthcare Became Big Business and How You Can Take it Back, by Elisabeth Rosenthal, is a powerful if somewhat monotonous recounting of the evils of American health care. But it only seeks to explain one weakness of contemporary American medicine, albeit an important one: it costs too much. Or, more accurately, prices are too high. As Uwe Reinhardt put it years ago, “it’s the prices, stupid.” 

Understanding the behavior of physicians, hospitals, drug companies, health insurers, and device manufacturers, as this book seeks to do, is critical if we are to change the system. The problem that they create, however, isn’t just that health care costs consumers too much; it’s also that the quality lags behind what is achievable—is evidenced by the poor standing of the US compared to other developed countries. Failing to consider both quality and cost is regrettable—we might, after all, be willing to tolerate the enrichment of drug company shareholders if what we got in return was an excellent, if pricey, product.

The litany of shenanigans by big business may be familiar to many readers, but Rosenthal's comprehensive and detailed accounting is impressive and compelling. Consider the first chapter on “the age of insurance.” The book recounts the story of how the same treatment costs orders of magnitude more--$100,000 vs $19,000 per medication infusion for a drug given monthly—when administered at NYU’s Langone Medical Center than when provided at another nearby facility. For the patient, whose treatment was covered by insurance, it didn’t much matter over the short run. But for the system as a whole, and ultimately for all patients through higher insurance premiums, it did matter. And the reason for the discrepancy is that NYU negotiated a better deal with third party payers than did the competition. What Rosenthal outlines but does not emphasize is that more powerful hospital systems and physician researchers interact with (some might say collude with) health insurance companies to produce this result. She explains that because of an arrangement with the NYU researcher who was largely responsible for creating the drug, NYU derived profit if total sales of the drug exceed a particular threshold. By negotiating a very high payment for the drug from the insurer, NYU is likely to exceed the threshold and cash in. So it’s not just the motivations of physicians, hospitals, and insurance companies acting separately that impact the health care system; it’s the way all of these forces work together that is crucial to achieving the end result.

Rosenthal presents one disturbing case after another. There’s the way hospitals and physicians game the system to assure that patients essentially have to use out-of-network providers when their insurance company will only cover in-network providers, forcing patients to shoulder what can be enormous costs. There’s the notorious “facility fee” that enables hospitals to charge insurers vastly more for a simple procedure such as injecting anti-inflammatory medication into a joint if it is done in an outpatient clinic than if it is done in a private office. What she neglects to explain is the way the system conspires to provide what is often inferior medical care to patients. Maybe this is more egregious with older patients than younger ones, and her focus is overwhelmingly people who aren’t enrolled in Medicare: either those with private insurance or no insurance at all. The facility fee example, for instance, doesn’t just mean higher costs. For a frail older person to get to a hospital clinic may mean going by car, negotiating a confusing parking garage, and walking a considerable distance from the garage to the office, none of which is so easy if you’re 85, have severe arthritis (the reason for going for the joint injection in the first place), and maybe have a little cognitive impairment to boot. The enthusiasm for high tech procedures, driven in part by the manufacturers of the devices used in the procedures, doesn’t merely drive up costs: for vulnerable, older individuals, such technological intervention may cause more harm than good. The anesthesia may result in confusion and the hospital stay in functional decline—quite apart from the effect on the cost of medical care.

Alas, the fixes the author proposes, the part of the book devoted to taking "health care back" from big business, aren’t going to fix the system. She calls for creative insurance plan design, for example plans that cover “essential” treatment fully and levy co-pays for “semi-elective” treatment. That’s much like what the ACA does when it requires full coverage for preventive services such as a screening colonoscopy, but allows the same colonoscopy to be billed in full (if the patient has a high deductible health plan) if the procedure is ordered to remove a cancerous polyp. Maybe that’s a good idea, although it leads to some bizarre incentives—better to get that polyp removed at the end of the plan year, when you might already have burned through your deductible, than at the beginning of the year, when the growth might be more curable; better to say nothing to your doctor about the blood you’ve noticed in your stools and just have a “screening test” than to mention the blood and undergo the procedure to treat a “disease.” But whether or not “benefit redesign” is a good idea—and one of the last major benefit redesign ideas wasn't so thrilling, it was those very high deductible health plans that are conquering the market—it’s not going to help patients now. Even the suggestions that could, in principle, help right away, such as “demanding price transparency” when getting an MRI, are a bit pie-in-the sky. You’re in the doctor’s office and s/he wants you to get a scan right away. You’re supposed to get a list of 5 centers that do MRIs and compare their prices? Really? What about quality? What about accessibility of the image to your physician? What about transportation to these other sites?

An American Sickness goes a long way to uncovering the workings of the health system and for that it is to be lauded. It is extensively and for the most part carefully researched, though there are errors. Rosenthal says pharmacists should be able to prescribe birth control pills because they all have PhDs and shouldn’t just be relegated to counting pills. Maybe they should be able to prescribe birth control pills, but most pharmacists have a BPharm (a bachelor’s degree), not a PhD. She says the website GoodRx allows comparison of prices for prescription drugs only for Medicare patients. Maybe that was once true, but it is no longer. But read this book for the insight it may give you on how the design of the system affects outcomes. We will need to build on that scaffolding to investigate the full range of systemic consequences—for quality as well as cost of health care, and to engage in meaningful reform.

May 21, 2017

Money Down the Drain

This month, the Commonwealth Fund, a private foundation that supports independent research on the health care system, released a report on just how much Medicare beneficiaries pay out of pocket for health care. The news is sobering: on average, they spend $3,024 and that doesn’t include what they pay for premiums.

I’m not sure why premiums are considered separately, but they’re pricey, too. While Medicare part A (hospital coverage) is free for almost everyone over age 65, Medicare part B (doctors’ fees, outpatient care, and lab tests) costs $134 per person per month. That is, if you’re single and earned less than $85,000 in 2015, or married and jointly earned no more than $170,000. After those thresholds, the premium rises steeply, first to $187 per person per month (for joint incomes of up to $214,000) and then on up to a maximum of $429 for the most affluent. Then there’s part D for medications. The average monthly cost for a drug plan this year is $42 per person. And finally, there are Medigap plans if people want coverage for their deductibles and co-pays—the national average for those plans is $183 per person per month.

Looking at averages is not terribly enlightening, but fortunately, the report delves far deeper. It turns out that among  people with three or more chronic medical conditions (30 million of the 56 million people enrolled in Medicare), 29 percent spent at least 20 percent of their incomes on out-of-pocket medical care plus premiums. Among the nearly 14 million people with a serious physical and/or cognitive impairment, 38 percent spent at least 20 percent of their incomes on out-of-pocket medical care plus premiums. The poorest people are particularly hard hit: among the 17 million people with three or more chronic conditions or functional limitations whose incomes is less than 200 percent of the federal poverty level, 42 percent spend at least 20 percent on medical expenses.

After reading the report, I had two questions. First, how do Medicare beneficiaries in Medicare Advantage plans fare compared to those in conventional, fee-for-service Medicare? They pay part B premiums plus a part C premium—which is instead of Part D but also includes more comprehensive coverage with fewer co-pays and deductibles. The actual part C premiums vary tremendously, both within a given insurance company (in Massachusetts, for example, Blue Cross offers 6 different Medicare Advantage plans, with monthly premiums ranging from 0 to $295 per person; a middle-of-the-road plan costs $79 per month) and across companies. My suspicion is that people with multiple chronic conditions or functional impairment are less likely than their healthier peers to choose Medicare Advantage—but that they would have lower out-of-pocket costs if they did. Someone should do the analysis.

Second, how would the ACA-Repeal-and-Replace bill passed by the House of Representatives affect Medicare? The answer seems to be that it would only affect it indirectly, mainly by  cutting federal spending on Medicaid by $880 billion over ten years. This would profoundly impact the 11 million people who are currently enrolled in both Medicare and Medicaid. It would also worsen the overall solvency of the Medicare program. The ACA levies an extra payroll tax of 0.9 percent on individuals earning over $200,000 a year ($250,000 for couples), a tax that is due to expire in 2018. The new bill would end the payroll tax a year early—thus ensuring that the Medicare trust fund, which pays for part A, will run out of money before 2025.

The take home message? Find out if there’s a good Medicare Advantage program available to you and what it costs. It just might be a better deal than regular Medicare. And lobby your senators to make sure that any new variant of repeal-and-replace doesn’t gut Medicaid or bankrupt Medicare.

May 15, 2017

Brave New World of Genetic Testing

In a provocative piece in the NY Times last week, science writer Gina Kolata suggests that the long term care insurance industry may be in a “death spiral.” The culprit, she argues, is genetic testing, which got a boost last month when the FDA approved testing by the company 23andMe. Previously best known for providing genealogical information to those who send in a saliva sample and a $99 fee, the personal genomics company is now authorized to provide information about genetic risk factors as well—for only an additional $26.

One of the ten conditions about which companies may offer information is Alzheimer’s disease. And perhaps the best established genetic risk factor for late-onset Alzheimer’s disease (sometimes called LOAD) is apoE. A gene that codes for a protein involved in cholesterol metabolism, apoE comes in three varieties, prosaically named apoE2, apoE3, and apoE4. Everyone has two copies of the apoE gene, so there are six possible genotypes, of which the most common are E2/E2, E3/E3, E4/E4, E2/E3, and E3/E4. The majority of people (63 percent, in one study of the distribution of the allele in 9 different populations) are E3/E3.

But while there is no way to definitively predict who will develop Alzheimer’s disease, fully 40 percent of people who develop LOAD are among the 25-30 percent of people who carry the e4 variant of the gene. And roughly half the residents of nursing homes have Alzheimer’s disease. As a result, according to spokesmen from the industry, a growing number of people are seeking testing from 23andMe to see if they have the e4 gene. If they have it, they buy long term care insurance. If they don’t, they take their chances.

If this trend continues—and as of 2017, 2 million people have obtained the direct to consumer genetic analyses---the pool of people buying long term care insurance could be heavily weighted towards those who actually will develop the disease. The health insurance industry, however, as consumers are perhaps finally coming to understand in the ongoing Obamacare wars, depends on pooled risk; it only works if the people who buy insurance include some people who will get sick and others who won’t. 

The reason the direct-to-consumer marketing of genetic information potentially spells doom for the long term care industry is that Americans are protected by the Genetic Information Nondiscrimination Privacy Act, which prevents insurers from requiring gene tests or using the results of genetic testing in coverage decisions. That means that ordinary people, without any physician input, can find out if they are at high risk, they can make decisions about buying coverage based on that assessment—and the insurance companies are powerless to intervene. If most of the people who are destined to get Alzheimer’s disease end up with insurance, the insurance company will end up paying out a lot more than they originally anticipated—leading to enormous increases in the rates or bankruptcy of the industry.

Now there are plenty of other reasons that the long term care insurance industry may collapse, and a good number of pre-existing reasons why it’s a poorly designed program. The amount of money it actually provides people is rarely enough to cover their actual costs, whether of home or institutional care. There are many barriers in the way of people using their benefits—for example, many policies require three months of disability before they kick in, which may be three months too long, especially if they are only going to be in a nursing home for three months. And Medicaid is currently available as a back up to pay for institutional care, provided people have “spent down” their personal savings, so the value of long term care insurance derives from its ability to shelter assets.

Analyzing the value of long term care insurance is a conversation for another blog post. But the point I want to make today is that before you rush out and get tested for Apo E, you should be aware of the limited predictive value of the test. While the likelihood of getting LOAD if you are one of the 2.6 percent of the population who have two copies of E4 is 91 percent, the likelihood of getting LOAD if you are one of the 22 percent of the population with one copy of the E4 allele falls to 47 percent. And if you are one of the 76 percent of the population with no E4 alleles, you still have a 20 percent of getting Alzheimer’s. Because the poor “negative predictive value”—because even with a negative test, you have a substantial risk of getting the disorder—physicians and organizations such as the Alzheimer’s Association have for years recommended against routine Apo E screening.

Interestingly, Apo E determination has been available to Europeans as a direct to consumer test for years. A study to find out what the short- and long-term psychological consequences were for patients with a positive test. Though the study only looked at people who requested testing, it found that there were no significant adverse consequences of getting bad news. So fear that you will become anxious or depressed is probably not grounds for resisting the impulse to be tested for Apo E4. But you should remember that it’s just a risk factor—and one over which you have no control—and plenty of people who test negative will still develop Alzheimer’s disease.

May 07, 2017

Falling Down on the Job

In the sixties, physicians routinely prescribed bed rest for patients who had suffered a heart attack. Then along came the recognition that bed rest led to clot formation in the lower extremities, clots that sometimes broke off and traveled to the lungs, causing potentially life-threatening pulmonary emboli. Bed rest also led to deconditioning—when patients finally were allowed to get up, they found they were often weak and wobbly. And so bed rest was out and early mobilization was in. But now, concurrent with a vigorous attempt to prevent falls among older hospitalized patients, bed rest is back in—and with more complications than ever, as reported in a thoughtful article in JAMA Internal Medicine last week.

In 2008, in response to the observation that “injurious falls” were responsible for increased hospital costs and were clearly bad for patients, the Centers for Medicare and Medicaid Services introduced a program incentivizing hospitals to prevent falls. Currently, a fall resulting in significant injury (such as a fracture) is one of eight hospital-acquired conditions that collectively determine whether hospitals will be penalized for poor performance. To address the CMS initiative, hospitals introduced a variety of techniques designed to keep older patients from falling such as bed alarms and “fall risk” signs on the door. According to Growdon and colleagues, the result has been a “national epidemic of immobility among hospitalized older adults.”

Paradoxically, the means used by hospitals to prevent falls don’t work. Bed (and chair) alarms are ineffective—which is not entirely surprising, as by the time a nurse responds to the buzzer indicating the patient has gotten out of bed (or chair), the person is probably already on the floor. Even a multi-prong study from Australia using a variety of different approaches simultaneously was unsuccessful.

But all those bed alarms and signs on the door do achieve something, and that’s to keep patients at bed rest. And just as bed rest was bad for heart attack patients in the sixties, it’s bad for older patients today. Bed rest promotes the development of confusion (delirium) and worsens mobility, so when patients finally do get out of bed, either late in their hospital stay or after they get home, they are more likely to fall.

Growdon, a resident in internal medicine at a major Boston teaching hospital, and his colleagues at a VA Hospital in Florida and at Hebrew Senior Life, a teaching nursing home, are rightfully indignant. They advocate promoting mobility rather than penalizing falls, arguing that “although hospital falls can lead to harm, treating them as ‘never events’ has led to over implementation of measures with little efficacy for falls [prevention] yet profound contribution to immobility.” They are, no doubt, correct. But why? Why should an incentive program based on outcomes lead to the adoption of a strategy that does not lead to the desired outcome?

If CMS had used a process measure, if it had offered extra payments to hospitals that introduced fall prevention programs, I wouldn't have been surprised that it resulted in hospitals adopting programs for the sake of having something, regardless of efficacy. But instead it opted to penalize hospitals for performing poorly, which should by rights have led to hospitals choosing to take steps that made a difference. What is it about the culture of hospitals or the leadership of hospital CEOs or the knowledge base of physicians and nurses that lets them make such irrational choices?

I wish I knew the answer. In the meantime, perhaps CMS would do well to offer carrots rather than sticks, and to be specific about the kind of carrots that it likes the most. If programs that promote mobility work, directives to get patients out of bed early and to consult physical therapy—both to prevent falls and to maintain function—then it’s those specific programs it should endorse and pay for.
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