- Is comparative effectiveness really coming to Medicare?
- When is OK not to follow the guidelines?
- Happy smokers vs. unhappy smokers in France.
- Are GPs living the good life in France?
- Will Groupon collapse?
- Cigarette Rx?
You are currently browsing the monthly archive for July 2011.
Tags: Current Events, Links
To what standard should the FDA hold new drugs? The FDA has a number of choices. Drugs companies could be required to prove that the drugs they make:
- Do no harm.
- Are more effective than placebos
- Are more effective than existing drugs
- Are more cost-effective than existing drugs, or
- Are both more effective and more cost effective than existing drugs.
For my money, I believe the standard should be the first and second ones. The drug company should simply have to show that the drug does no harm and is more effective than placebos.
Due to asymmetric information, however, the FDA could require the drug companies to compare their drug’s effectiveness against existing treatments or gauge the cost-effectiveness of the treatment. Although these effectiveness and cost-effectiveness tests need not affect drug approval, insurance plans could use this information to determine if they should cover the drugs.
GoozNews has some interesting commentary regarding calls for the FDA to perform Stage III CER testing.
“I do not support the position of advocates like former New England Journal of Medicine editor Marcia Angell who think new drugs should have to be proven better than what exists before they are approved. If companies want to bring comparable therapies to market, that’s their business. It may even be the case that some me-too drugs work in some sub-populations, but not in others. So if one drug fails to achieve lower cholesterol, or offer arthritis pain relief, for instance, the doctor can switch her patient to the newer drug. But if the new drug is not proven to be better than what exists in a large Phase III trial, then physicians, patients and payers will have the information they need to insist that people start on the cheapest, comparably effective medicine that is available. For most drug classes, that will mean a generic.“
Tags: CER, FDA, Pharmaceuticals, Regulation
Reducing Medicare and Medicaid spending is not only America’s number one health care goal, it should also be its top overall budget priority. Finding ways to cut Medicare costs is vital.
Although the CBO projects that Medicare and Medicaid spending will top $850 billion in 2011, we should not forget about another federal health care system on this 4th of July: the VA.
The VA operates 152 hospitals, 133 nursing homes, 824 community-based outpatient clinics and other facilities to provide care to veterans.
According to this Healthcare Finance News article, the federal government is increasing funding for the VA in 2012 and 2013.
“President Barack Obama requested $54.9 billion in funding for the Department of Veterans’ Affairs (VA) for fiscal year 2012 and $56.7 billion for fiscal year 2013, according to a report released by the Government Accountability Office this week.
VA officials said the new budget estimate was increased overall by about $1.4 billion for fiscal year 2012 and $1.3 billion for fiscal year 2013 to support healthcare-related initiatives proposed by the Obama administration, such as expanding homeless veterans programs, opening new healthcare facilities, offering additional services for caregivers and providing benefits for veterans exposed to Agent Orange.”
On this 4th of July, let’s ponder how the U.S. can best provide effective health care for our nation’s veterans at a reasonable cost.
Tags: VA, Veterans Affairs
“Getting into a new field of physics is like reading a Russian novel. There are a lot of names to cope with, and at first you wonder who’s who.”
- Kenneth W. Ford, The Quantum World.
Tags: Physics, Quotation, Russian Novel
“From 2004 through 2009, the volume of Medicare outpatient services per FFS beneficiary increased at roughly a 4.3 percent annual rate for a cumulative increase of 23 percent over the six-year period. During the same period, Medicare inpatient discharge volume declined at roughly a 0.9 percent annual rate, and inpatient discharges per FFS Part A beneficiary decreased by about 4 percent from 2004 to 2009.”
Will this trend save or cost Medicare money?
According to MedPAC’s March 2011 report, there are two key reasons for this. The first is a shift in the site of service from inpatient to outpatient units. For instance, many routine surgical procedures can now be conducted in the outpatient setting. This development likely reduces cost per treatment, but may increase costs if individuals are more likely to receive invasive treatments. Alternatively, if physicians are more likely to have an ownership stake in the outpatient facility, surgery rates per diagnosis may increase.
Another reason for the rise in outpatient costs is hospital acquisition of physician practices. Hospitals want to acquire physician practices for two reasons: first, it makes their patients more likely to use their hospital, and second, fees for visits to physicians in hospital-based facilities (consider outpatient) are more lucrative to visits in free-standing facilities. Specifically, “When patients visit a physician office that is part of a hospital’s outpatient department, Medicare pays a facility fee to the hospital and a reduced fee for the physician’s services. The combined fees paid for visits to hospital-based practices are often more than 50 percent greater than rates paid to freestanding practices.”
Thus net effect of the shift to outpatient services, thus, has an ambiguous effect on total Medicare payments.
- Source: MedPAC March 2011 Report to Congress.
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