Unbiased Analysis of Today's Healthcare Issues

The Angelina Jolie Effect

Written By: Jason Shafrin - Sep• 23•14

You may know that Angelina Jolie is an actress but do you know that she also is influencing the health care decisions of millions of women worldwide?  At least that is the findings from a recent article in Breast Cancer Research.  The Guardian reports:

Referrals for genetic breast cancer tests more than doubled in the UK as a result of what doctors have described as the “Angelina effect”.

In May last year, actor Angelina Jolie revealed that she had undergone a double mastectomy to avoid breast cancer.

She took the decision after testing positive for the BRCA1 gene mutation that greatly increases the risk of developing the disease.

A study has measured the impact of her announcement on women in the UK. It shows that in June and July last year, the number of GP referrals for genetic counselling and DNA tests for breast cancer mutations increased two and a half times on the same period in 2012.

In a superstar economy, it seems like celebrities’ decisions affect all kinds of behavioral choices, including health care decisions.

Jolie has had double mastectomy

Longer trials or larger sample size?

Written By: Jason Shafrin - Sep• 22•14

Developing drugs is expensive. Some estimates have estimated that the cost of bringing a drug to market is $1 billion. In addition, payers are now reimbursing based on the perceived value of a treatment. That is, treatments that provide more health benefits receive higher reimbursements.

In this world of value-based pricing (VBP), pharmaceutical companies have an incentive to show strong efficacy not only to secure approval, but also to secure higher reimbursement rates from payers. A question for these firms is, should they invest in trials with a longer duration or in increasing the trials’ sample size?

A paper by Breeze and Brennan (2014) relies on the following methodology to answer this question:

We modify the traditional framework for conducting ENBS [expected net benefit of sampling] and assume that the price of the drug is conditional on the trial outcomes. We use a value-based pricing (VBP) criterion to determine price conditional on trial data using Bayesian updating of cost-effectiveness (CE) model parameters.

Using this approach and parameterizing the model using treatments for systemic lupus erythematosus, the authors find that:

…shorter trials with a large sample size are associated with greater profit forecasts for the pharmaceutical company. Although there is substantial uncertainty in the long-term effectiveness of treatments in chronic diseases, increasing sample size is a more efficient method of data collection in this illustrative example.


What can Geographic Variation in Health Care Spending Tell Us About Efficiency?

Written By: Jason Shafrin - Sep• 21•14

In a project with the Institute of Medicine (IOM), I examined the sources of regional variation in Medicare and Medicaid spending and spending growth. The IOM wisely concluded that policymakers should target decision-makerss rather than geography when attempting to improve the efficiency of the healthcare system.

I recent paper by the Louise Sheniner of the Brookings institute claims that patient characteristics may drive most of the regional variation in healthcare spending. Her conclusion is:

But the paper has several findings that suggest that the variation in Medicare spending does not represent wasteful spending that could be easily eliminated without significant effects on the health system. First, population characteristics have more explanatory power for Medicare spending than measures of social capital, indicating that the variation in patient characteristics is more important than variation in provider characteristics. Second, health measures are significantly more correlated at the state level than at the individual level, making it likely that state level regressions do a better job of controlling for unobserved variation in population health. Third, there does not seem to be a significant relationship between the use of “preference-sensitive procedures” and the level Medicare spending. Fourth, states with high levels of Medicare spending tend to have lower levels of non-Medicare spending. Providers in these states may face greater financial difficulties, and may “volume shift” to Medicare patients in order to cover costs.

First, I would agree that population characteristics do make up a large share of the differences across states. However, they cannot explain all the differences. Since Dr. Sheiner relies on state-level data rather than individual level data, and the Dartmouth Group wisely points out the issue of an ecological fallacy of assigning individual-level inference based on group level data. However, the examination of average patient characteristics misses the point. In our research for IOM, we found that variation in median spending across regions is much less than regional variation in average spending. In essence, it is how difference physician practices treat the sickest patients in the tails of the distribution that determines whether an area is low or high cost; regional policies to treat low or medium cost patients have little affect on an areas relative spending ranking due to the skewed nature of health care data.

This finding is consistent with Dr. Sheiner’s conclusion that preference-sensitive procedures are not driving the regional variation in spending. Just because one area is more likely to give hip or knee replacements than another, this practice pattern will be dwarfed by how a region treats end of life patients or patients with multiple serious comorbidities.

Overall, however, I do agree with Dr Sheiner’s conclusion that geography is a straw man here. We need to focus on how policymakers treat the sickest patients and identify treatments that are most cost-effective to help improve their health and the nations’ fiscal bottom line.



Written By: Jason Shafrin - Sep• 18•14

Here are some links to check out for the end of the week:

CoR is up

Written By: Jason Shafrin - Sep• 17•14

Rebecca Shafer of AMAXX turns in another great roundup of risky posts in this week’s Cavalcade of Risk.

Employers lose interest in providing health insurance

Written By: Jason Shafrin - Sep• 16•14

Recent reforms have lead more and more employers to shift employees to health insurance exchanges.  A PwC report states:

Thirty-two percent of employers are considering moving their active employees to a private exchange in the next three years, according to PwC’s 2014 Touchstone survey of 1,200 employers. Many employers already offer online tools similar to exchanges for other benefits such as retirement, which could boost uptake.

Public exchanges are particularly attractive for small employers (who face higher insurance rates due to higher load factors) and firms with high employee turnover. Private exchanges allow consumers to comparison shop for health insurance online marketplace. These private exchanges help employers decrease administrative cost and–according to Ezekiel Emanuel, private exchanges may be most attractive for mid-size firms.

The report also finds that high-deductible health plans are here to stay. Two-thirds of employers offer these plans.

Health IT in Four Countries

Written By: Jason Shafrin - Sep• 14•14

How have different countries developed their health IT systems? A paper by Adler-Milstein et. al in Health Affairs provides some insight. I summarize their findings below.

  • Australia. In the 1990s-early 2000s, the government supported the adoption of EHRs through federal incentives to general practitioners. These efforts focused primarily on EHRs with e-prescribing. In 2005
    the national and state governments established the National E-Health Transition Authority (NEHTA) to develop a national EHR system, which included unique identifiers for patients and providers. The national EHR system that developed is a shared record that relies on national interoperability standards that enable access to health-relevant administrative data and will enable providers to populate records with data from locally controlled EHR systems.
  • Canada. Canada Health Infoway is an independent, federally funded, non-profit organization that coordinates national EHR efforts across provinces. The personally owned EHR draws from local EHR systems. Ontarios Electronic Child Health Network,  gives authorized providers access to a patients entire medical history from birth to age 19.
  • Denmark. Danish efforts to promote EHR began in the 1990s, but the government only made electronic record adoption mandatory for general practitioners in 2004 and for specialists in 2006. National integration is led by MedCom, a publicly financed not-for-profit joint venture between public authorities and private companies. Beginning in 1994, MedCom developed national standards to promote the interoperability of patient data and payment systems. All providers (e.g., hospitals, pharmacies, labs and physicians) are connected to MedCom. MedCom is backbone of Sundhed.dk, which is “a public, internet-based portal that collects and distributes health care information among citizens and health care professionals.” The website gives patients online access to lab results, medication profiles, waiting lists, scheduling, and prescription renewals and also allows patients to email physicians.
  • United States. The US government has had little intervention in HIT and EHR until 2009 when the Health
    Information Technology for Economic and Clinical Health (HITECH) Act passed. The centerpiece of this legislation, known as the meaningful-use program, creates financial incentives in the form of cash payments from public insurers to providers if they demonstrate the use of certified EHRs to meet a set of meaningful-use criteria.  The stage 2 meaningful use criteria require providers to offer patients the ability to view, download, and transmit their health information online and eventually be able to submit amendments to their records.  The US developed BlueButton for VA and Medicare beneficiaries so that these individuals can access their medical records online.


HWR + More

Written By: Jason Shafrin - Sep• 11•14

David Williams hosts this week’s Health Work Review at the Health Business Blog.  If you need more entertainment for the end of your week, check out the links below as well.

The Apple Watch and Health

Written By: Jason Shafrin - Sep• 10•14

Apple recently unveiled its smart watch.  The watch not only is a mini-computer, but it can help improve your health.

Pharmafile reports:

The watch comes with an app that promises to calculate all kinds of data including heart rate, calories burned and other metrics in one place – and can also count how many stairs you climb.

Although the Apple’s new technology is exciting, some health experts are disappointed.

Much of this monitoring software and hardware is already available through a variety of existing apps from Apple and its rivals Samsung, along with Google’s Android…One of the largest omissions – but the most anticipated in the healthcare market – was the release of more details on the new HealthKit platform. This will allow users to pool their personal data and also share it with doctors – should they so wish.

Apple will also face significant competition from other big tech firms.

Google is another tech giant to step into the health world taking on both Apple and Samsung with its ‘Google Fit’ service, which collects and aggregates data from common fitness trackers and health-related apps.

Google has also recently launched a new healthcare company called ‘Calico’ – and last month joined forces with AbbVie to help develop new treatments for conditions that affect the elderly.

Nevertheless, this innovation appears to be a positive step for improving patient health.

Will Obamacare Increase the share of Part-Time Workers?

Written By: Jason Shafrin - Sep• 10•14

The ACA requires large employers to provide coverage to all full-time workers. However, providing insurance is costly. Will employers avoid this requirement by hiring more part-time workers? An Urban Institute report claims that this is not the case.

We find no evidence that the ACA had already started increasing part-time work before 2014. We find a small increase in part-time work in 2014 beyond what would be expected at this point in the economic recovery based on prior experience since 2000. This increase in part-time work is fully attributable to an increase in involuntary part-time work.

Does this mean that the ACA will not increase the share of workers who are part-time? My guess is that the ACA will increase the share of workers who are part time, although this effect is more likely to occur gradually over multiple years.

Employers could shift existing workers from full to part-time, but doing so would likely alienate workers and demoralize staff. The other mechanism for increasing the share of part-time workers is hiring part-time workers who replace full time workers after the quit, retire or are fired. The latter approach would not demoralize the current workforce, but would lead to a gradual shift in the share of part-time workers. However, it may take a number of years before there is a noticeable change in the share of part-time workers due to the ACA.