Unbiased Analysis of Today's Healthcare Issues

DA Henderson, RIP

Written By: Jason Shafrin - Aug• 30•16

The man, Donal Ainslie (DA) Anderson, whole help eliminate smallpox died on August 19.  The Economist has an obituary to the man.

This crowd of helpers, which delighted him, meant that no Nobel prize could be given for wiping out smallpox. If it had been, he might have shared it with William Foege, who first devised surveillance-containment, and Benjamin Rubin, inventor of the bifurcated needle, an easy and ingenious instrument which used a mere 25% of the normal amount of vaccine. But he was the man who kept the whole show on the road, strong-arming governments to provide funds and to make their own vaccines of the necessary purity, potency and stability; conducting his own cold-war diplomacy with the notably helpful Russians; muscling past the tentacular regional bureaucracies of the WHO; sending out continual reports on progress; and answering within three days, before e-mail, every plea that came in from the field.

Problems rose up constantly. In Ethiopia, rebels attacked the vaccinators. Afghanistan brought deep snow and no maps. In Bangladesh trucks could not cross the bamboo bridges; in India mourners had to be stopped from floating smallpox corpses down the Ganges. He experienced most of this himself, frequently decamping from cramped Geneva armed with “Scottish wine” (his favourite medicine) to urge on the troops. Out in the trenches he also faced the full horror of what he was fighting. At a hospital in Dhaka the stench of leaking pus, the pustule-covered hands stretched towards him, the flies clustering on dying eyes, convinced him anew that he had to win this war.

A man who’s life truly had an enormous impact on the health and wellbeing of those alive today.

How to prevent another EpiPen controversy

Written By: Jason Shafrin - Aug• 30•16

Dana Goldman–my colleague at PHE and a professor at USC–offers three suggestions on how to prevent generic products from increasing their prices drastically as occurred in the EpiPen saga.  In Stat News, he makes three recommendations:

First, Congress should mandate that the Federal Trade Commission report on the availability of all such drugs and devices by identifying all the companies that make them and how they are being supplied to hospitals and pharmacies.

Second, the Food and Drug Administration should examine the FTC report to discover which essential products have competition or supply issues. When supplies are limited — epinephrine has been on a drug shortage list since 2012 — the FDA should be given new authority to allow foreign imports to solve the immediate crisis. In the case of the EpiPen, that would result in prices roughly one-quarter of Mylan’s US listed retail charge.

Finally, the Centers for Disease Control and Prevention, which has experience buying vaccines to prevent supply problems, should be authorized to begin buying essential generic drugs and devices on behalf of federal users, including Veterans Affairs, Medicaid, and Medicare.

Fostering competition is the best approach for driving down the price of generics.  When that fails–perhaps due to the prescence of a natural monopoly or limited number of suppliers–then some additional government oversight may be necessary.


Will payers pay for new healthcare technologies

Written By: Jason Shafrin - Aug• 28•16

Wearables, digital medicine and ‘beyond-the-pill’ are the latest healthcare craze.  New technologies–particular those combined with patients mobile phones–offer the promise of improving patient health.  One question is will insurance companies, the government and other payers actually reimburse for these technologies.  According to a recent FiercePharma article, the answer is yes…if there is evidence.

Payers say they’re willing to reimburse for digital health technologies, the health economics consultancy Xcenda found in a recent survey. But they need proof first. “Payers want to see the clinical effectiveness of these digital health technologies and they want to understand the cost effectiveness,” Xcenda President Tommy Bramley told FiercePharmaMarketing in an interview.

That may be why many payers are evaluating technologies, but few of those surveyed are currently covering them. Digital health purveyors, including pharma, need to better demonstrate the clinical and economic value to payers, Bramley said.

Evidence is key to demonstrating the value of these new technologies.

The End of the Obamacare Exchanges

Written By: Jason Shafrin - Aug• 25•16

Princeton economist Uwe Reinhardt things so.  In an interview with Vox he states:

The natural business model of a private commercial insurer is to price on health status and have the flexibility to raise prices year after year. What we’ve tried to do, instead, is do community rating [where insurers can’t price on how sick or healthy an enrollee is] and couple it with a mandate.

When you do this as the Swiss or Germans do, you brutally enforce the mandate. You make young people sign up and pay. But we are too chicken to do that, so we allow people to stay out by doing two things: We give them a mandate penalty that is lower than the premium. And we tell them, If you’re really sick, we’ll take care of you anyhow. [A federal law called EMTALA requires hospitals to treat all patients with life-threatening conditions regardless of their ability to pay.]…

Liberals think this will settle itself. Eventually, though, we all know about the death spiral that actuaries worry about, and I think what you’re seeing now is a mild version of that. These things accelerate, as premiums keep rising.

With insurers such as Aetna announcing that they will drop 80% of their Obamacare policies, these concerns are more than hypothetical.

Thursday Links

Written By: Jason Shafrin - Aug• 25•16

AA and selection bias

Written By: Jason Shafrin - Aug• 24•16

This video that discusses whether alcoholics anonymous actually improves the outcomes of alcoholics who attend the meeting.  More broadly, the video the AA treatment effect discussion serves as an example for expounding on some fundamental statistical issues such as selection bias, randomization, intention to treat, marginal effect, instrumental variables, and others.

Does adherence information affect physician decisions?

Written By: Jason Shafrin - Aug• 22•16

According to a recent study of patients with hypertension, the answer is yes.

The study by Kronish et al. (2016) used a cluster randomized trial design made up of 24 providers and 100 patients.  Half of the providers were randomized to receive received a report summarizing electronically measured patient adherence to their blood pressure regimen as well as and recommended clinical to address potential non-adherence and non-response issues.  The other half of providers just treated patients as they normally would (i.e., usual care) as they did not receive any report.

How did access to the adherence report affect provider decisionmaking?

The proportion of visits with appropriate clinical management was higher in the intervention group than the control group (45 out of 65; 69 %) versus (12 out of 35; 34 %; p = 0.001). A higher proportion of adherent patients in the intervention group had their regimen intensified (p = 0.01), and a higher proportion of nonadherent patients in the intervention group received adherence counseling (p = 0.005). Patients in the intervention group were more likely to give their clinician high ratings on quality of care (p = 0.05), and on measures of patient-centered (p = 0.001) and collaborative communication (p=0.02).

Although one should be cautious of the external validity of extrapolating these results to other clinical settings, as more and more adherence data becomes available to physicians due to information collected from wearables, digital medicine and other sources, this study says that physicians will take this information into account when making treatment recommendations.


Another VBP fail?

Written By: Jason Shafrin - Aug• 21•16

Value-based purchasing is supposed to tie reimbursement to quality of care and costs.  Providers that are high quality and low cost are supposed to get higher reimbursement, those that are low quality and high cost the reverse.  The key question is: does this reimbursement approach work in practice?

According to a recent study by Grabowski et al. (2016), the answer is probably not. Using data between 2008 and 2012 for skilled nursing facilities (SNF) in Arizona, New York and Wisconsin, the authors examine the impact of Medicares SNF value based purchasing (VBP) program and find:

Medicare savings were observed in Arizona in the first year only and Wisconsin for the first 2 years; no savings were observed in New York. The demonstration did not systematically impact any of the quality measures. Discussions with nursing home administrators suggested that facilities made few, if any, changes in response to the demonstration, leading us to conclude that the observed savings likely reflected regression to the mean rather than true savings.

In short:

The Federal nursing home pay-for-performance demonstration had little impact on quality or Medicare spending.

This evidence is disconcerting as CMS continues to push for value-based provider payments.


Weekend Links

Written By: Jason Shafrin - Aug• 20•16

Health Wonk Review: Short and Sweet Edition

Written By: Jason Shafrin - Aug• 18•16

If you want the best health care articles on the web, then you came to the right place. This week the Healthcare Economist is hosting the world-renowned Health Wonk Review. I’ve divided the articles into 6 categories: health insurance, mental health, pharmaceuticals, physician pay, regulation, and value measurement.  No fancy themes, just high-quality content.

Without further ado, here are the best healthcare articles of the past 2 weeks,

Health Insurance

Mental Health


Physician pay


Value measurement