Unbiased Analysis of Today's Healthcare Issues

Friday Links

Written By: Jason Shafrin - Aug• 12•16

Trends in Life Expectancy among Older Americans, by Race

Written By: Jason Shafrin - Aug• 10•16

It appear that most of the gains in longevity and reductions in disability among elderly Americans accrued to Caucasians. Using data from the 1982 and 2004 National Long Term Care Surveys and the 2011 National Health and Aging Trends Study, Freedman and Spillman (2016) find the following:

We examine changes in active life expectancy in the United States from 1982 to 2011 for white and black adults ages sixty-five and older. For whites, longevity increased, disability was postponed to older ages, the locus of care shifted from nursing facilities to community settings, and the proportion of life at older ages spent without disability increased. In contrast, for blacks, longevity increases were accompanied by smaller postponements in disability, and the percentage of remaining life spent active remained stable and well below that of whites.


Quotation of the Day

Written By: Jason Shafrin - Aug• 09•16

Common decency counts. Showing up on time and giving respect is key when you’re the CEO.

Bob Lefsetz in “Yahoo Lessons” at The Big Picture

Clinton vs. Trump: A Healthcare Comparison

Written By: Jason Shafrin - Aug• 08•16

AJMC has a nice article summarizing some of the key differences between the two presidential candidates.  I paraphrase the article below.

  1. The future of the Affordable Care Act (ACA). Clinton wants to keep or even expand the ACA and wants to cap out-of-pocket drug costs.  Clinton has even called for a public option. On the other hand, Trump has called for a repeal of the ACA, in particular the individual mandate.
  2. Approaches to Medicaid. Clinton wants to make sure that all states expand Medicaid eligibility, but has not specified how she would do this.  Trump’s first called for block grants for Medicaid then he says the federal government should review basic Medicaid options with states, because, “we must also make sure that no one slips through the cracks simply because they cannot afford insurance.”  
  3. Controlling prescription drug costs.  Both candidates want to lower drug prices.  Clinton wants to allow Medicare to negotiate drug prices, tie federal research help to limits on profits, end direct-to-consumer ads and allow more generics and biosimilars to enter the market. Trump’s simply says, “Congress will need the courage to step away from the special interests and do what is right for America.”  
  4. Healthcare and immigration. Trump of course wnats to build his wall in part to reduce the cost of care to illegal immegrants.  Clinton, on the other hand, would allow all people–including illegal immigrants–to  buy coverage on the health insurance exchanges.
  5. Attention grabbers. Trump proposed allowing businesses to buy health insurance coverage for their employees across state lines. Clinton wants to expand Medicare, letting patients aged 55 and older buy into the system.  

ACOs and VBP

Written By: Jason Shafrin - Aug• 07•16

Accountable Care Organizations aim to link providers through the supply chain (i.e., hospitals, physicians, post-acute care facilities) to incentivize providers to improve quality and reduce costs.  In addition to its ACO program (the Medicare Shared Savings Program), the Centers for Medicare and Medicaid Services (CMS) have implemented a number of value-based payment programs, including the Hospital Value-Based Purchasing Program (HVBP), the Hospital Readmissions Reductions Program (HRRP), and the Hospital-Acquired Conditions (HAC) Reduction Program.  Whereas joining an ACOis optional, all hospitals that accept Medicare payments are required to participate in Medicare’s HVBP, HRRP and HAC programs.  Payment adjustments for HVBP can be as high as 1.75%, for HRRP 3%, and HAC 1%.

Are hospitals in ACOs more likely to perform well on the Medicare VBP programs?  Muhlestein et al. (2016) attempts to answer that question.  Using data from FY2013-FY2016, they find:

For FY2016, ACO-participating hospitals performed better than non-ACO hospitals for the HRRP, but not on the HVBP and the HAC Reduction Program. Longitudinal analysis, however, reveals that results are more varied, with evidence that hospitals joining ACOs did increasingly better than their peers for the HRRP, but had inconsistent results year-over-year with the HVBP.

Part of the reason for the lack of correlation, however, is that the scoring methodologies change frequently.  Nevertheless, based on this study, hospitals in ACOs do not universally provide better care than those outside an ACO network.

Are You Just a Number?

Written By: Jason Shafrin - Aug• 04•16

That is the abbreviated title of a new commentary on the Forbes blog that I wrote with Tomas Philipson.  The full article is HERE.  An excerpt is below.

New value frameworks in health care have emerged due to increasing cost pressures. Although value frameworks can be useful tools, they should be used to complement the patient-physician treatment decision-making process, rather than substitute for it. This entails getting away from “one size fits all” rules as well as including all treatment aspects that matter to patients. This will resolve the stark difference between many valuation frameworks that deem treatments to be low value and patients who are willing to go bankrupt to access them.  

Check out the whole piece HERE.

Providers move into digital health

Written By: Jason Shafrin - Aug• 04•16

Marketplace reports:

On a recent visit to the hospital, Riley, who is five years old, swallowed a tiny white pill with an embedded sensor – roughly the size of a grain of sand. When it reached her stomach, it sent a signal to a patch she’s wearing on her skin and alerted her parents and doctors that she’d taken her medication.

Making sure Riley has taken her pills is especially important because she had a kidney transplant earlier this year.

Why would hospitals use this technology? Not only to improve patient health but to cement their relationship with patients.

Children’s hospitals are searching for the best way to monitor patients and keep them out of the ER. Digital health startups are looking for patients to test their products. Julie Hall-Barrow, Senior Director of Healthcare Innovation at Dallas Children’s Medical Center, says keeping kids healthy means finding partners outside of the hospital, in the home, in the school, and with faith-based organizations…

“These companies gave them convenience and an app, what we as an industry missed was they also wanted to extend the relationship with their network of caregivers,” Perialas said.

Combining the latest technologies with established medical providers seems to be a recipe for success for both the patient and provider perspective.


Impact of Brexit on Pharma

Written By: Jason Shafrin - Aug• 04•16

There is a lot of talk that Brexit will be a disaster.  While I believe that much of this disaster talk is overblown, there are clear business implications.  Pharmafile provides an example of how Brexit would affect a small pharmaceutical company conducting clinical trials in the UK.

In the latter case, UK-based pharmaceutical companies with no other offices or manufacturing plants in the EU/EEA may do well to consider relocating to an EU/EEA country in order to continue benefitting from the advantages that come with being established in the EU/EEA. The implications of not relocating are significant for companies that rely on clinical trials conducted in the UK to support an EU marketing authorisation application, as Pharma business conducted in the UK will be considered conducted in a third country. This means that, among other things, in order to rely on clinical trials, the applicant will have to demonstrate that they were conducted in compliance with at least EU equivalent standards.

There is still much regulatory uncertainty in health care and other industries, but we do know that Brexit will be causing some changes.

Incentives for investing in “off label” trials

Written By: Jason Shafrin - Aug• 01•16

Aaron Carroll of the Incidental Economist draws on a column from his colleague Austin Frakt in The Upshot to explain why there is not more research into off-label uses of patented or generic drugs.


Off Label Drug Use

Written By: Jason Shafrin - Jul• 31•16

Approximately one in five prescriptions for drugs in the US are for off label use.  In some cases, this may be inapprorpiate as there is typically limited clinical evidence supporting off label use.  In other cases, off label use is approrpiate.  Clinical trials rarely enroll children or pregnant women and thus medictions are often not indicaated for these populations; however, children and pregnant women get sick too, so it is entirely appropriate to have off-label prescribing for these populations, although doing so does carry additional risks.

Can drug companies promoto their drugs for off-label use?  Promote: no.  Communicate: sometimes.  Health Affairs has a nice policy brief that clarifies the off-label prescribing issue:

Under FDA rules, any promotional materials distributed by a company should be truthful, balanced, nonmisleading, and supported by substantial evidence. In addition, it has been illegal for drug manufacturers to directly promote or advertise a drug for any indication that the FDA has not approved. However, companies are not categorically prohibited from disseminating information about off-label uses, and the FDA’s approach to regulating and enforcing the distinction between communication and promotion has evolved over the past several decades in response to both legislative changes and legal challenges.

Manufacturers can communicate about off-label uses of their drugs in a number of ways. Companies are permitted to respond to unsolicited requests from health care professionals about unapproved uses and might also support independent continuing medical education activities at which off-label uses are discussed. Since the passage of the Food and Drug Administration Modernization Act (FDAMA) of 1997, companies are also permitted to distribute peer-reviewed journals and reference books that discuss off-label uses, although this practice is subject to certain limitations. In 2014 the FDA expanded this authority to include non-peer-reviewed clinical practice guidelines.

Under Section 114 of the FDAMA, companies were also given the power to share health care economic information about approved uses of their drugs with formulary committees, managed care organizations, and other entities that make reimbursement and coverage decisions. However, it is unclear how often drug companies have used this pathway, which some attribute to a lack of clarity on how the FDA interprets that section of the law, as well as to the availability of alternative channels for health economic communication (principally, the Academy of Managed Care Pharmacy’s Format for Formulary Submissions, which provides comprehensive drug information to managed care organizations).

Companies may not always follow these rules.  When they do not, they are liable for significant fines.

In 2012, for example, GlaxoSmithKline (GSK) was fined $3 billion by the federal government, in part for off-label promotion of several of its drugs

Why don’t pharmaceutical firms just do the clinical trials necessary to demonstrate that the drugs are safe and effective for other indication?  The answer is the cost.  The trials can cost millions of dollars and take many years to complete.

Regardless of the current off-label statutes, the law and regulations will almost certainly evolve over time.