Unbiased Analysis of Today's Healthcare Issues

End of Life decisions

Written By: Jason Shafrin - Feb• 01•17

Netflix has a very interesting documentary on end of life decisions.  Do you put your loved one on a ventilator, extend their life, but perhaps increase their suffering?  Or do you let nature take its course, but potentially lose time you could have with your loved one.  These are not easy decisions and one that the documentary Extremis tackles head on.  The film was nominated for an Academy Award for best short documentary and the trailer is below.


The last Obamacare sign up?

Written By: Jason Shafrin - Jan• 31•17

Today is the last day to sign up for Obamacare for 2017.  If President Trump has his way, it could be the last day to sign up for Obamacare ever.  In fact, Marketplace reports that

Trump administration decided to pull ads promoting last-minute sign-ups, although it reversed that decision shortly after.

The media put forth mixed estimates of the degree to which a potential Trump repeal of Obamacare has affected sign-ups.  On the one hand, people worried that this is their last chance to sign up, may rush to get Obamacare coverage before it is repealed.  In fact, NPR reports the following:

“Our volume has been the same as it has been in past years,” [Katie Nicol, a senior manager who oversees the five so-called navigators’ said.

That tracks with the latest numbers released by the Department of Health and Human Services. As of Jan. 14, 8.8 million people had signed up for coverage — slightly more than last year.

On the other hand, few people will want to sign up for an insurance plan that may be eliminated just a few months from now.  The Washington Post reports:

As of Monday, grass-roots Get Covered America groups in three-dozen states had 30 percent fewer consumers requesting online appointments to get assistance in choosing health plans compared with a year ago, according to the nonprofit organization Enroll America.

We’ll see what the final numbers say, but the only thing certain for 2018 is that Obamacare–and health care more generally–will not stay the same.


Will federal government spending be captured by the elderly?

Written By: Jason Shafrin - Jan• 30•17
According to a January 2017 report from the Congressional Budget Office (CBO), spending on entitlement programs for the elderly is the primary factor driving increased budget deficets over the next 10 years.  The CBO states:
Outlays rise faster than revenues—by about 5 percent a year, on average—increasing from 20.7 percent of GDP in 2017 to 23.4 percent in 2027, approximately 3 percentage points above their 50-year average. Relative to the size of the economy, the increase in mandatory spending—specifically, for Social Security and Medicare—and payments for interest on the government’s debt would more than offset a significant projected decline in discretionary outlays, which are already more than 2 percentage points below their 50-year average
This projection shouldn’t be news to those following fiscal policy in recent years, but if President Trump wants to increase spending and lower taxes without addressing the issues of Medicare and Social Security, one can expect the U.S. debt burden to grow even beyond the CBO’s projections.

Which cancer treatment is best?

Written By: Jason Shafrin - Jan• 29•17

This seems like a straightforward question, but clearly depends on what you mean by “best”.  Some drugs will be more efficacious and have more adverse events; other drugs may be less efficacious but have fewer adverse events.  What if a one drug shows an 80% improvement in progression free survival (PFS), but a 50% improvement in overall survival (OS); whereas another drug shows only a 50% increase in progression free survival but an 80% increase in overall survival.  Patient preferences over these treatment outcomes can vary.

But even if we just consider gains in OS, how should this be measured?  Average survival?  Median survival?  Share of patients that survive X years?  Number needed to treat (NNT)?  Does this matter?

In fact, a recent article by Karweit et al (2017) found that it does.  The authors looked at the following ways of measuring improvements in overall survival:

  • Median  OS
  • mean OS
  • 1-year survival rate
  • NNT to avoid 1 death at 1 year

The authors compare these outcomes across treatments for breast cancer (BC), colorectal cancer (CRC), melanoma, non–small cell lung cancer (NSCLC), prostate cancer (PC), and renal cell cancer (RCC).

So which drug was best?  It depends on the outcome you use.

  • Breast cancer: ado-trastuzumab emtansine demonstrated the greatest improvement in median OS, pertuzumab in mean OS, eribulin mesylate in 1-year survival rate; trastuzumab demonstrated the lowest NNT. For CRC, bevacizumab demonstrated the greatest improvements in median OS and 1-year survival rate, as well as the lowest NNT, whereas cetuximab had the greatest improvement in mean OS.
  • Colorectal cancer: Capecitabine, the only agent assessed in CRC with a nonplacebo comparator, showed the least improvement across all 3 outcomes. For melanoma, ipilimumab showed the greatest benefit with all 3 outcomes.
  • NSCLC: Pemetrexed exhibited the greatest improvements of median and mean OS, whereas erlotinib showed the greatest improvement in 1-year survival rate and the lowest NNT.
  • Prostate cancer: Enzalutamide demonstrated the greatest improvement in median OS, sipuleucel-T showed the greatest improvement in mean OS, and abiraterone had the greatest improvement in 1-year survival rate and the lowest NNT.
  • RCC: Sunitinib demonstrated the greatest improvements in both median and mean OS, whereas temsirolimus had the greatest improvement in 1-year survival rate and the lowest NNT.

The authors propose a measure portfolio to more comprehsnively measure efficacy.  They conclude as follows:

Our preliminary qualitative and quantitative analysis, which used more and different metrics than may be the standard, suggests that a broad array of survival outcomes are required to fully assess and benchmark the relative clinical value of anticancer agents. This approach becomes progressively more important as drugs transition from clinical development to regulatory approval and widespread application. The portfolio of measures assessing impact needs to be more broadly meaningful in general populations; our concept of a measure portfolio starts to move in that direction.


  • Jennifer Karweit, MS; Srividya Kotapati, PharmD; Samuel Wagner, PhD; James W. Shaw, PhD, PharmD, MPH; Steffan W. Wolfe, BA; and Amy P. Abernethy, MD, PhD. Jennifer Karweit, MS; Srividya Kotapati, PharmD; Samuel Wagner, PhD; James W. Shaw, PhD, PharmD, MPH; Steffan W. Wolfe, BA; and Amy P. Abernethy, MD, PhD. An Expanded Portfolio of Survival Metrics for Assessing Anticancer Agents. JMCP. January 17, 2017

Friday Links

Written By: Jason Shafrin - Jan• 26•17

Plus check out the Health Wonk Review’s Inauguration Edition at Managed Care Matters.

How much money do drug companies get for their drugs?

Written By: Jason Shafrin - Jan• 25•17

Let’s say a you fill a 30-day prescription and the list price of the drug is $100.  Let’s say that you pay a $10 copay and your insurer pays $90.  What share of this $100, does the drug company receive.

Most people would guess pretty close to $100, but a recent report by Aaron Vandervelde and Eleanor Blalock finds that the actual much lower.  They find that branded pharmaceutical manufacturers only receive 39% of all revenues paid by patients and insurers.  Even if you take into price concessions granted by pharmaceutical manufacturers, this number still would only be 47%.

So who gets all the rest of the money?   Non-manufacturer entities including amounts realized by participants in the supply chain received $22.  These stakeholders would include the pharmacy benefit manager (PBM), the pharmacy and any drug wholesalers.  An addition 20% of the cost is paid through wholesaler stocking fees, rebates to PBMs, rebates to Medicaid and TRICARE, funds to cover cost patient sharing assistance and the Part D coverage gap, program 340B chargebacks and a federal excise fee on brand drugs.

The share of revenue received by pharmaceutical manufacturers is declining although the trend is modest.  In 2013, pharmaceutical manufacturers received 40.5% of revenue compared to 38.8% in 2015.

Readers should recognize that it is not clear what the “right” level of revenue the pharmaceutical manufacturers receive.  Giving more funds to pharmaceutical firms is likely to increase innovation as they are the groups creating the new treatments.  At the same time, wholesalers, pharmacies, and PBMs do provide valuable services and clearly need to be compensated in one form or another.

The report does note that many of these discounts “are not plainly visible, leading to misperceptions about the relative share of gross and net drug expenditures realized by brand manufacturers.”  At the same time, pharmaceutical firms have been hesitant to share information on these negotiated prices.  To get to a world where we measure treatment value, we need not only good research on treatment benefits, but also additional clarity on drug prices.  This report is a step in the right direction towards better understanding  of the prices paid and the stakeholders to whom these funds go.

Judge blocks Aetna-Humana merger

Written By: Jason Shafrin - Jan• 24•17

A judge blocked a potential $37 billion deal for the merger of large U.S. health insurers Aetna and Humana.  The Washington Post provides some explanation behind the judge’s logic:

Bates wrote in his opinion that the proposed merger would have decreased competition substantially in the Medicare Advantage market in 364 counties. Aetna and Humana had argued that Medicare Advantage plans also competed against traditional Medicare options, but the judge sided with the Justice Department that the private Medicare plans were a separate market. The companies also proposed that divesting some of that business to a smaller insurer, Molina Healthcare, could have addressed those concerns, but the judge did not agree.

In an additional twist, the judge claimed to uncover the reason why Aetna was withdrawing from Obamacare exchanges.

Aetna withdrew from the majority of the exchanges that it had participated in this year, citing financial losses. The judge, however, wrote that Aetna withdrew from 17 counties highlighted in the case “specifically to evade judicial scrutiny of the merger.”

A big question is whether this ruling will stand.  Trump calls himself a more business-friendly president and it is unclear whether an appeal will be more likely to find more favorable judges if any are appointed by the new President.

Dismantling Obamacare: A How to Guide

Written By: Jason Shafrin - Jan• 23•17

President Trump today released an Executive Order that asked the secretary of HHS to:

“…exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay” parts of the law that would place a fiscal burden on states, individuals or health-care providers. Most of the provisions in the ACA can’t just be changed by HHS or the president; they require action from Congress or a lengthy period involving public comment.

Could Trump really unravel Obamacare? Certainly. The first method for doing this would be to end the individual mandate. Without the individual mandate, healthy individuals will likely stop buying insurance as their estimated benefits would be much lower than the cost of insurance. As healthy people leave the market, premiums rise further. This premium rise causes the moderately healthy now to leave the market, and premiums rise even higher. The process can perpetuate itself into an adverse selection death spiral.

Margot Sanger-Katz notes another method Trump could use to unravel Obamacare.

The easiest way for the Trump administration to undermine the health law would be to stop defending a lawsuit brought by the House of Representatives. That suit said that the Obama administration lacked the authority to pay certain Obamacare subsidies. A lower court ruled for the House, meaning that by simply withdrawing from the appeal, the Trump administration could start a process to eliminate those subsidies and cause a collapse of the insurance market. Mr. Trump’s order said nothing about that policy choice.

Without subsidies, the adverse selection death spiral would be even more rapid and the market likely would quickly dissolve.

Is this what Trump wants? Does he propose replacing Obamacare with something else? There are still many, many questions left unanswered. What we do know, is that U.S. health care policy is in the process of some significant changes.

ISPOR Paper of the year

Written By: Jason Shafrin - Jan• 22•17

The ISPOR paper of the year award for best publication in Value in Health was given to Basch et al. (2016) for their study titled Methods for Developing Patient-Reported Outcome-Based Performance Measures (PRO-PMs).  The abstract is below.

Objective: To recommend methods for assessing quality of care via patient-reported outcome-based performance measures (PRO-PMs) of symptoms, functional status, and quality of life.

Methods: A Technical Expert Panel was assembled by the American Medical Association– convened Physician Consortium for Performance Improvement. An environmental scan and structured literature review were conducted to identify quality programs that integrate PRO-PMs. Key methodological considerations in the design, implementation, and analysis of these PRO-PM data were systematically identified. Recommended methods for addressing each identified consideration were developed on the basis of published patient-reported outcome (PRO) standards and refined through public comment. Literature review focused on programs using PROs to assess performance and on PRO guidance documents.

Results: Thirteen PRO programs and 10 guidance documents were identified. Nine best practices were developed, including the following: provide a rationale for measuring the outcome and for using a PRO-PM; describe the context of use; select a measure that is meaningful to patients with adequate psychometric properties; provide evidence of the measure’s sensitivity to differences in care; address missing data and risk adjustment; and provide a framework for implementation, interpretation, dissemination, and continuous refinement.

Conclusion: Methods for integrating PROs into performance measurement are available.

Congratulations to Dr. Basch and his team on the paper.


Trump Links

Written By: Jason Shafrin - Jan• 19•17

In honor of inauguration day, some Trump-relevant links: