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Category: Health Policy

The Lynne Chou O’Keefe Fallacy

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By MATTHEW HOLT

Rob Coppedge and Bryony Winn wrote an interesting article in Xconomy yesterday. I told Rob (& the world) on Twitter yesterday that it was good but wrong. Why was it wrong? Well it encompasses something I’m going to call the Lynne Chou O’Keefe Fallacy. And yes, I’ll get to that in a minute. But first. What did Rob and Bryony say?

Having walked the halls and corridors and been deafened by the DJs at HLTH, Rob & Bryony determined why many digital health companies have failed (or will fail) and a few have succeeded. They’ve dubbed the winners “Digital Health Survivors.” And they go on to say that many of the failures have been backed by VCs who don’t know health care while the companies they’ve invested in have “product-market fit problems, sales traction hiccups, or lack of credible proof points.”

What did the ” Survivors” do? They have:  

“hired health care experts, partnered effectively, and have even co-developed their models alongside legacy players. Many raised venture capital from strategic corporate investors who have helped them refine their product, accelerate channel access, and get past the risk of “death by pilot.”

Now it won’t totally shock you to discover that Rob heads Echo Health Ventures, the joint VC fund from Cambia Heath Solutions (Blues of Oregon) & BCBS of N. Carolina, and Bryony runs innovation at BCBS of N. Carolina. So they may be a tad biased towards the strategic venture = success model. But they do have a point. Many but not all of their portfolio are selling tools and services to the incumbents in health care, which mostly includes health plans, hospitals and pharma.

And now we get to the Lynne Chou O’Keefe fallacy. (You might argue that fallacy is the wrong term, but bear with me).

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Maternal Mortality – Separating Signal from Noise

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By AMEYA KULKARNI, MD

When Samuel Morse left his New Haven home to paint a portrait of the Maquis du Lafayette in Washington DC, it was the last time he would see his pregnant wife. Shortly after his arrival in Washington, his wife developed complications during childbirth. A messenger took several days on horseback to relay the message to Mr Morse. Because the trip back to New Haven took several more, his wife had died by the time he arrived at their home.  So moved was he by the tragedy of lost time that he dedicated the majority of the rest of his life to make sure that this would never happen to anyone again. His subsequent work on the telegraph and in particular the mechanism of communication for the telegraph resulted in Morse code – the first instantaneous messaging system in the world.

Mr Morse’s pain is not foreign to us in the 21st century. We feel the loss of new mothers so deeply that, when earlier this year new statistics on the rate of maternal death were released and suggested that American women died at three times the rate of other developed countries during child birth, doctors, patient advocates, and even Congress seemed willing to move heaven and earth to fix the problem. As someone who cares for expectant mothers at high risk for cardiovascular complications, I too was moved. But beyond the certainty of the headlines lay the nuance of the data, which seemed to tell a murkier story.

First at issue was the presentation of the data. Certainly, as a rate per live births, it would seem that the United States lagged behind other OECD countries – our maternal mortality rate was between 17.2 and 26.4 deaths per 100,000 live births, compared to 6.6 in the UK or 3.7 in Spain. But this translated to approximately 700 maternal deaths per year across the United States (among approximately 2.7 million annual births). While we would all agree that one avoidable maternal death is one too many, the low incidence means that small rates of error could have weighty implications on the reported results. For instance, an error rate of 0.01% would put the United States in line with other developed countries.

Surely, the error rate could not account for half the reported deaths, right? Unfortunately, it is difficult to estimate how close to reality the CDC reported data is, primarily because the main source data for maternal mortality is a single question asked on the application for death certificates. The question asks whether the deceased was pregnant at the time of death, within 42 days of death, or in the 43 to 365 days prior to death. While pregnancy at the time of death may be easy to assess, the latter two categories are subject to significantly more error.

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The Untold Reality of Medical Device Shortages in the U.S.

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Chaun Powell
Soumi Saha

By CHAUN POWELL, MBA and SOUMI SAHA, PharmD, JD

Say the word “shortage” to a healthcare professional and chances are the first thing that will come to mind is drug shortages. With good reason, too – there are more than 100 drugs currently at risk or not readily available for U.S. hospitals, according to the Food and Drug Administration’s (FDA) drug shortage list. 

Shortages don’t just apply to drugs, however, and as 2019 has shown, healthcare providers must become more focused on shortages of the medical device variety. The shutdown of multiple medical device sterilization facilities in 2019 is poised to jeopardize the availability of devices that are critical to routine patient care. On Nov. 6, the FDA is hosting a panel to hear from stakeholders, including hospital epidemiologists and healthcare supply chain experts, on the risks associated with facility shutdowns and potential action steps.

The industry as a whole is in need of meaningful solutions. As taxpayers, patients and key stakeholders in healthcare, we must collaborate to eliminate interruptions to our healthcare supply chain. For those invested in improving healthcare from the inside, this means working across competitive boundaries and borrowing best practices from sister industries as we work to identify the root cause of these issues and provide meaningful and preventative solutions.

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How are hospitals supposed to reduce readmissions? Part II

By KIP SULLIVAN, JD

The notion that hospitals can reduce readmissions, and that punishing them for “excess” readmissions will get them to do that, became conventional wisdom during the 2000s on the basis of very little evidence. The Medicare Payment Advisory Commission (MedPAC) urged Congress to enact the Hospital Readmissions Reduction Program (HRRP) beginning in 2007, and in 2010 Congress did so. State Medicaid programs and private insurers quickly adopted similar programs.

The rapid adoption of readmission-penalty programs without evidence confirming they can work has created widespread concern that these programs are inducing hospitals to increase utilization of emergency rooms and observation units to reduce readmissions within 30 days of discharge (the measure adopted by the Centers for Medicare and Medicaid Services [CMS] in its final rule on the HRRP), and this in turn may be harming sicker patients. Determining whether hospitals are gaming the HRRP and other readmission-penalty schemes by diverting patients to ERs and observation units (and perhaps by other means) should be a high priority for policy-makers. [1]

In Part I of this series I proposed to address the question of whether hospitals are gaming the HRRP by asking (a) does research exist describing methods by which hospitals can reduce readmissions under the HRRP and, in the event the answer is yes, (b) does that research demonstrate that those methods cost no more than hospitals save. If the answer to the first question is no, that would lend credence to the argument that the HRRP and other readmission-penalty schemes are contributing to rising rates of emergency visits and observation stays. If the answer to second question is also no, that would lend even more credence to the argument that hospitals are gaming the HRRP.

In Part I, I noted that proponents of readmission penalties, including MedPAC and the Yale New Haven Health Services Corporation (hereafter the “Yale group”), have claimed or implied that hospitals have no excuse for not reducing readmission rates because research has already revealed numerous methods of reducing readmissions without gaming. I also noted many experts disagree, and quoted a 2019 statement by the Agency for Healthcare Research and Quality that “there is no consensus” on what it is hospitals are supposed to do to reduce readmissions.

In this article, I review the research MedPAC cited in its June 2007 report to Congress, the report that the authors of the Affordable Care Act (ACA) cited in Section 3025 (the section that instructed CMS to establish the HRRP). In Part III of this series I will review the studies cited by the Yale group in their 2011 report to CMS recommending the algorithm by which CMS calculates “excess” readmissions under the HRRP. We will see that the research these two groups relied upon did not justify support for the HRRP, and did not describe interventions hospitals could use to reduce readmissions as the HRRP defines “readmission.” The few studies cited by these groups that did describe an intervention that could reduce readmissions:

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The Opportunity in Disruption, Part 1

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By JOE FLOWER

The system is unstable. We are already seeing the precursor waves of massive and multiple disturbances to come. Disruption at key leverage points, new entrants, shifting public awareness and serious political competition cast omens and signs of a highly changed future.

So what’s the frequency? What are the smart bets for a strategic chief financial officer at a payer or provider facing such a bumpy ride? They are radically different from today’s dominant consensus strategies. In this five-part series, Joe Flower lays out the argument, the nature of the instability, and the best-bet strategies.

“It’s a buckdancer’s choice, my friend. Better take my advice. You know all the rules by now, and the fire from the ice.”

— Robert Hunter, “Uncle John’s Band”              

Chief Financial Officer: tough gig. Seriously. Whether for a payer or a healthcare provider, the CFO’s job is the exact point where the smiling faces on the billboards meet the double entry, the financing, the payer mix, the debt structure. And it all has to work out in the black. It has to do that sustainably, not only this year but next year and five years from now. Best guess? It’s going to get a lot tougher, with shifting revenue streams, market boundaries, new technologies, growing consumer expectations and uncertain politics. 

Raise your hand if you can tell me the significance of these names: Univac, Control Data, Burroughs, Digital, Honeywell, IBM, NCR.

These companies dominated the computer world in 1980. As of 1990, all but IBM were gone, bankrupt, subsumed into some other company, or just out of the computer business. The one that survived, IBM, is the one that said, “Maybe we should at least get a toehold in this new personal computer game, even though it is risky for our main revenue streams.” All the others went “poof.”

A number of factors—radical new technologies with vast potential, ramifying customer frustration, shifting user base—are coming together to put healthcare today at exactly the place the computing world was in 1980.

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A Proposal to Improve Healthcare and Make It More Affordable

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By STEVE ZECOLA

Americans spend about $3 trillion per year on healthcare, or about $10,000 per person per year. Despite these expenditures, Americans are worse off than their international counterparts with respect to infant mortality, life expectancy and the prevalence of chronic conditions.

In policy debates, Republicans mostly prefer to let the marketplace devise the appropriate outcomes, but this approach ignores the market failures that plague the industry.

On the other hand, Democrats propose a variety of solutions such as “Medicare for All” which nationalizes all healthcare insurance or, as a variant, “Medicare as an Option for All” which further extends the federal government into the provision of healthcare insurance. Such approaches could actually result in a less efficient outcome, or worse yet, create a market beset by political ping pong when Administrations change.

This paper proposes a new standards-based approach for fixing the inefficiencies plaguing the healthcare industry in the United States. As described herein, a non-profit standards body would be established by Congress to bring a coordinated approach to healthcare for each of the top ten chronic diseases.

Such an approach would establish consistent priorities and practices across all of the components of the healthcare industry affecting these chronic diseases, including standards of care, areas of research emphasis and insurance guidelines.

Under such an industry structure, patient care would improve and the overall costs for the provision of healthcare would drop significantly.

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A National Patient Identifier: Should You Care?

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By ADRIAN GROPPER, MD

The rather esoteric issue of a national patient identifier has come to light as a difference between two major heath care bills making their way through the House and the Senate.

The bills are linked to outrage over surprise medical bills but they have major implications over how the underlying health care costs will be controlled through competitive insurance and regulatory price-setting schemes. This Brookings comment to the Senate HELP Committee bill summarizes some of the issues.

Who Cares?

Those in favor of a national patient identifier are mostly hospitals and data brokers, along with their suppliers. More support is discussed here. The opposition is mostly on the basis of privacyand libertarian perspective. A more general opposition discussion of the Senate bill is here.

Although obscure, national patient identifier standards can help clarify the role of government in the debate over how to reduce the unusual health care costs and disparities in the U.S. system. What follows is a brief analysis of the complexities of patient identifiers and their role relative to health records and health policy.

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Why the Health Care System Is Incapable of Reducing Its Own Costs: A Brief Structural System Analysis

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By JOE FLOWER

Leading lights of the health insurance industry are crying that Medicare For All or any kind of universal health reform would “crash the system” and “destroy healthcare as we know it.”

They say that like it’s a bad thing.

They say we should trust them and their cost-cutting efforts to bring all Americans more affordable health care.

We should not trust them, because the system as it is currently structured economically is incapable of reducing costs.

Why? Let’s do a quick structural analysis. This is how health care actually works.

Health care, in the neatly packaged phrase of Nick Soman, CEO of Decent.com, is a “system designed to create reimbursable events.” For all that we talk of being “patient-centered” and “accountable,” the fee-for-service, incident-oriented system is simply not designed to march toward those lofty goals.

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Patient Privacy Rights: Comment on Regulatory Capture

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Deborah C. Peel
Adrian Gropper

By ADRIAN GROPPER, MD and DEBORAH C PEEL, MD

To ONC and CMS

We begin by commending HHS, CMS, and ONC for skillfully addressing the pro-competitive and innovative essentials in crafting this Rule and the related materials. However, regulatory capture threatens to derail effective implementation of the rule unless HHS takes further action on the standards.

Regulatory capture in Wikipedia begins:

“Regulatory capture is a form of government failure which occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate the industry or sector it is charged with regulating.  When regulatory capture occurs, the interests of firms, organizations, or political groups are prioritized over the interests of the public, leading to a net loss for society. Government agencies suffering regulatory capture are called “captured agencies.” (end of Wikipedia quotation.)

The extent to which HHS has allowed itself to be influenced by special interests is not the subject of this comment. This comment is just about how HHS and the Federal Health Architecture can act to more effectively implement the sense of Congress in the 21st Century Cures Act.

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One Physician’s Frustrations of Practicing Amidst the CHIPHIT Complex and Implications for the Future of the U.S. Healthcare System

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By HAYWARD ZWERLING, MD

The high cost, low quality and systemic inequities of the U.S. healthcare system have been the impetus for its redesign. Our healthcare system is now controlled by Consolidated Healthcare institutions, Insurance companies, Pharmaceutical companies and Health Information Technology companies (CHIPHIT complex). The CHIPHIT complex, along with the Federal Government, will create and control our future healthcare system. Ominously missing from this list are independent healthcare policy experts, independent healthcare providers and members of the general public.

Historical precedents have demonstrated that the CHIPHIT complex is incapable of creating the healthcare system we need.

Thus, if we hope to build a low cost, high quality, egalitarian healthcare system, physicians and their professional organizations must take an emphatic stand against the CHIPHIT complex today.

Consolidated Healthcare Institutions

There are innumerable mandates which make running a small medical practice very difficult. As a result, many younger physicians will no longer attempt to start a new medical practice and existing profitable practices, which are looking to off- load their regulatory burdens, are being acquired by large healthcare institutions and private equity firms.

While these consolidated healthcare institutions vocalize their desire to improve our healthcare system, many enforce a uniformity on the practice environment which belies the reality of patient care; that there is no “best” practice model, nor are there information technology tools which work well for all physicians. This imposed uniformity stifles physician innovation, which is a necessary precondition to improve our healthcare system.

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