Unbiased Analysis of Today's Healthcare Issues


Written By: Jason Shafrin - Aug• 17•17

The market works!

Written By: Jason Shafrin - Aug• 16•17

In 2011, CMS created a demonstration to have competitive bidding for durable medical equipment (DME).   Prior to the implementation of this program, CMS used an administrative fee schedule, similar to how physicians are currently reimbursed.  How did this market-based solution fare?  A paper by Newman, Barrette, and McGraves-Lloyd (2017) answers this question.

We compared prices from Round 1 of the Medicare competitive bidding program, which were established for the periods 2011–13 and 2014–16, to prices paid by national commercial insurers for the same types of items in 2011–14. Our results suggest that the initial years of the program produced prices comparable to those obtained, on average, by large commercial insurers—sophisticated purchasers that presumably were able to negotiate prices with suppliers of durable medical equipment and similar items.


Philipson to join CEA

Written By: Jason Shafrin - Aug• 15•17

The WSJ reports:

President Donald Trump named Tomas Philipson, an economist at the University of Chicago who has specialized in health-care policy, to the three-member Council of Economic Advisers on Monday.

More information is in this White House press release.  Dr. Philipson is one of the founders of my current employer, Precision Health Economics.   I wish Tomas the best of luck in his new endeavor.

Off-label use of cancer drugs

Written By: Jason Shafrin - Aug• 15•17

When each drug is approved by the FDA, the drug is not approved to treat all patients.  Each drug receives an “indication” which basically represents the types of patients the drug can treat.  Giving the treatment to patients with said indication is known as “on label” prescribing.

Drugs developed to treat one disease may sometimes be used “off label” to treat another disease.  In cancer treatment, for instance, in cases where there may be no effective treatments for a patient’s tumor, other cancer treatments may be used “off label” to treat this patient. It is often unclear whether “off label” drug use is inappropriate or not.

Smieliauskas et al. (2017) looks at off-label cancer drug use is a recent study by:

…we identified 41% of utilization of infused chemotherapies as being off‐label, including 29% of use deemed as appropriate off‐label use and 17% of utilization characterized as inappropriate off‐label administration under reference compendia over the 1999–2007 timeframe. We observed an overall declining trend from 1999 to 2007 for all three measures of off‐label use: overall, appropriate, and inappropriate use.

The authors define inappropriate off-label drug use as any use outside of those recommended by drug compendia, such as the National Comprehensive Cancer Network (NCCN).  The authors rely on a crude measure as some off-label uses may be helpful to patients if physicians have private information not available to health insurers or recorded in claims data that may make the off label treatment decision reasonable.

The authors also investigate whether state laws that mandate insurers to cover cancer treatments for off-label indications recommended by drug compendia.  They find:

…no discernible effect of the implementation of state laws to mandate coverage of off‐label use of cancer drugs on utilization in eight states that were late adopters of these mandates…Overall, these results suggest null to small effects on off-label utilization of the state laws passed during the time window of our analysis.

The authors are surprised by this small effect, but it could be the case that most private insurers already cover off-label use of cancer drug therapies included in these drug compendia.


Too many trials, not enough patients

Written By: Jason Shafrin - Aug• 13•17

As research in new cancer treatments has grown, scientists may have run into a serious roadblock: there many not be enough patients to fill the needed clinical trials.  As the New York Times reports:

There are too many experimental cancer drugs in too many clinical trials, and not enough patients to test them on. The logjam is caused partly by companies hoping to rush profitable new cancer drugs to market, and partly by the nature of these therapies, which can be spectacularly effective but only in select patients…

As a result, there are more than 1,000 immunotherapy trials underway, and the number keeps growing. “It’s hard to imagine we can support more than 1,000 studies,” said Dr. Daniel Chen, a vice president at Genentech, a biotechnology company.

In a commentary in the journal Nature, he and Ira Mellman, also a vice president at the company, wrote that the proliferating trials “have outstripped our progress in understanding the basic underlying science.”

“I think there is a lot of exuberant rush to market,” said Dr. Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center. “And we are squandering our most precious resource — patients.”

While the limited supply of cancer patients available for clinical trials is a serious scientific problem, cancer patients should be excited that there is a significant investment in research and development to find cures for these same cancer patients.


Understanding The Value Of Innovations In Medicine

Written By: Jason Shafrin - Aug• 10•17

Health Affairs is holding an interesting event in September on “Understanding The Value Of Innovations In Medicine” at the National Press Club. They describe the event as follows:

Value” is at the center of discussions of payment and policy, but value has different definitions and meanings reflecting the diversity of stakeholders in the healthcare system. As part of our ongoing efforts to foster discussion about this important concept in health policy, on September 13 Health Affairs will sponsor a forum for policymakers to examine various frameworks for formally defining and measuring value and discuss the public policy issues and strategies attendant to their use.

You can see the full list of speakers, and RSVP for the event (or webcast) here.

The Stethoscope

Written By: Jason Shafrin - Aug• 10•17

The site 99% Invisible has an interesting post on the invention of the stethoscope had how it transformed medicine.

René Laennec actually felt that patient’s accounts of their own disease were still important, but the quest for objective information about disease was underway, and the stethoscope was just the beginning. Now we have X-rays, CT scanners and MRI and PET scans. All of these devices are basically trading upon the same paradigm that the stethoscope created: that doctors should be able to detect abnormalities inside the body to reach a diagnosis, regardless of how the patient is feeling.

At the same time, new diagnostic innovations are basically making the stethoscope part of the physician costume rather than a needed diagnostic.

Powerful imaging technologies like ultrasound have made the stethoscope exam less critical to the diagnostic process. Medical students aren’t as good as using stethoscopes as they used to be, and across the board doctors today rely less on the stethoscope to make diagnoses. The rise of portable ultrasound has some doctors arguing that we don’t need the stethoscope anymore… “It’s become almost a ritual more than an actual tool in terms of making diagnosis.”

Interesting throughout.

Should we put an end to Medicare Advantage?

Written By: Jason Shafrin - Aug• 09•17

Austin Frakt of the Incidental Economist argues convincingly–and I agree with him–that the answer is no.

Medicare Advantage plans have been found to be of higher quality than traditional Medicare. They also reduce wasteful use of health care by managing care, something the traditional program doesn’t do at all. Finally, they fill in gaps in coverage and cost sharing of the traditional program. They’re able to do so when the traditional program is not because changing traditional Medicare would require legislation, and it’s hard to achieve political consensus on anything in health care these days.

The bottom line is that Medicare Advantage plans offer choices that some beneficiaries value. They can deliver the Medicare benefit more efficiently and with higher quality. Yet, taxpayers do pay more to plans than they could, given plans’ own costs. Paying less might mean plans leave the market and that enrollees get less. There are always tradeoffs.

A longer piece on Medicare Advantage is published by Frakt in the New York Times.   Frakt’s article focuses mostly on the the current state of Medicare Advantage but does not fully capture the value of choice.

To consider the reason why choice is important, think about the decision to buy a car.  Let’s say that the Toyota Camry is the car that provides the best value for dollar.  Should we mandate that all people buy a Camry?  The answer is no.  Some people may prefer the less practical, but higher performance and higher cost Ferrari; others may prefer lower cost used cars.  In addition to the value of choice, having a private market for health insurance allows Medicare fee-for-service to compare its performance against private insurers.  If patients believe the quality of care they receive will decrease over time, they can shift to Medicare Advantage plans.  This choice value is difficult to quantify in a given year, but over time having options will likely lead to improved quality of care and insurance packages that better target patient demand.

Can Medicaid beneficiaries access primary care providers?

Written By: Jason Shafrin - Aug• 08•17

In general the answer is yes, but often with some difficulty.  AJMC recaps the findings from a the CDC Morbidity and Mortality Weekly Report (MMWR) Quick Stats section from July 21, 2017.

88.9% of primary care physicians said they are accepting new patients, based on 2015 data from the National Electronic Health Records Survey. However, the survey found there are differences in acceptance rates based on the patient’s expected form of payment:

  • 94.2% of physicians accepted patients with private insurance
  • 77.4% of physicians accepted patients with Medicare
  • 71.6% of physicians accepted patients with Medicaid

Why is there such a big difference?  They key reason is physician reimbursement rates.

Daniel Polsky, PhD, MPP, an economist at the Wharton School at the University of Pennsylvania, ran an experiment in which field workers tried to get appointments, half posing as Medicaid recipients, and half posing as clients with private insurance. They did the experiment in 2012, before the ACA increased Medicaid payments and again in 2014, right after the pay boost took effect. The pay increase caused about an 8% increase in the number of people who could get appointments.

This is one clear example where having health insurance does not guarantee access to care.


How many people don’t have any health insurance options

Written By: Jason Shafrin - Aug• 06•17

Much of the news has claimed that the Affordable Care Act is a failure because individuals in many counties have few or even no health insurance options.  However, how many counties truly will have zero Obamacare exchange insurance options in 2018 ? The Kaiser Family Foundation reports that there are only 17 counties covering 9,595 enrolles where people would have zero insurance options.  Of these 17, 14 counties are located in Nevada, 1 in Wisconsin, 1 in Illinois and 1 in Indiana.

The Obamacare Exchanges aren’t the only problem.  Even more counties are left with no Medicare Advantage plan choices.  While Medicare enrollees can always use traditional Medicare fee-for-service plan, there are many more counties that don’t offer an MA plan. Kaiser Family Foundation again reports that there are 140 counties with no Medicare Advantage plan offered.  Most of these counties are located in Wyoming, Utah, Idaho, inland California, and Nebraska.  Further, there are no Medicare Advantage plans in Alaska.

Thus, access to plan choice is not only an issue for Obamacare Exchanges but also for Medicare Advantage.  Despite this worry, most individuals in densely populated cities have a number of insurance options; many individuals in more rural areas, however, have much fewer health insurance choices.