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Saturday, January 28, 2017

Health insurance as a contributor to high medical costs

After writing about the coming demise of the Affordable Care Act, I began to think, again, about why it costs so much to deliver healthcare in this country. If it was cheaper, legislation to make healthcare a right, rather than the randomly distributed privilege it is now, would be so much easier.

Medical costs doubled every decade from 1960 through 2000. This happened in tandem with the rise of comprehensive health insurance. Today the vast majority of health care is paid for by some sort of health insurance. Hospitals and physicians spend a huge amount of time generating information to convince insurance companies to pay us. Patients aren't usually aware that more than half of the time doctors or nurses spend at work is used to document what we do. These days it is primarily on a computer. The documentation can be helpful to communicate our thoughts and plans to colleagues or keep a record of what happened so we can create a history that caregivers can read at some future time, but the majority of it is to prove to insurance companies that we worked hard and we did what we were supposed to do. There are also many employees of a hospital or a clinic who are employed primarily to communicate with insurance companies so we can be paid. I've heard it estimated that 50% of human hours in a hospital is devoted to billing. This rings about true, though I think that if we were to examine all of the adjustments we have made over the years that are due to our payment system, we would find the percentage to be higher.

In an attempt to make us do our jobs better, we are monitored for the quality of our care as measured by adherence to certain guidelines for serious diseases in the hospital. It is cumbersome to develop the tools we need to report on, for instance, how we treat sepsis (overwhelming infection.) The data regarding how to do this best is still actively evolving and new recommendations seem to show up in the good journals a few times a year. By the time we have our tools developed, the newest recommendations have changed and insurance companies are still judging us based on outdated guidelines.

The amount of administrative complexity associated with insurance billing is huge and requires the insurance companies to employ large numbers of people. Each of these people's salaries and the new large buildings they sit in are part of medical costs as well and are reflected in insurance premiums and become part of the cost of delivering healthcare.

Insurance includes not only private health insurance companies such as Blue Cross and Humana, but also federal and state administered insurance, Medicare and Medicaid. Public and private payers have very similar inefficiencies built into their systems. Public insurance providers, at least in theory, have another level of inefficiency built in since they not only are large bureaucracies using complex schemes for paying for services delivered to people who are far removed, but they also require expensive legal processes to be funded.

There are other parts of the equation that add up to high medical costs, and some of them have their very own devoted blog posts. A third party payment system, such as we have, along with fee for service payment for medical care are a recipe for rising costs.

It would be jolly to dismantle such an inefficient system, except that it would also be economically horrific on a national and possibly global scale. Nine percent of Americans are directly employed in the healthcare industry. This doesn't include all of the people employed because we have a large and growing healthcare industry. It doesn't include the postal worker who delivers health related junk mail, the construction workers who build the new health insurance building, the people who polish the Mercedes Benz of the CEO's of hospitals, the devoted teachers who educate healthcare workers or the many other people who thrive or survive because the healthcare industry is booming. Reducing costs by making a major cut in the way we do business, such as getting rid of private insurance companies, would have far reaching consequences on employment and the economy.

This is one of the reasons that changing the way we do healthcare is so tricky. Perhaps we want to continue to spend lots of money on healthcare because it is a quirky thing we Americans like to do. Even so, it seems like it should be possible to have better outcomes for all of the money we spend. We ought to be able to winnow out the parts of the system that don't add value. In order to make such changes, we should go slow, creating alternatives that prove their value and edge out present less functional systems.

Creating a national health care system, a single payer, seems almost attractive enough to make what would be a huge and potentially catastrophic change. Canada and France, both of whom have systems that provide healthcare for every citizen at a cost that is lower than that in the US, use single payers. In Canada, with which I am more familiar, this makes billing incredibly simple and actually possible for a doctor to do him or herself quickly and without help. Patients do not pay for anything except for most drugs, dental care and some other necessities that are specifically excluded from coverage. Instead they pay a hefty but income adjusted tax to pay for the entire system, called Medicare. There are some private health insurance companies that people sometimes use to pay for those things that are not included in Medicare coverage, but this is a small fraction of the healthcare industry.

It could be argued that we have tried very hard to make a healthcare system work with a hodge podge of public and private funding and that it clearly hasn't worked, with rising prices and far from universal coverage, even with changes wrought by Affordable Care Act. A single payer system is the cure for our ills. A single payer could negotiate with providers of healthcare services, setting prices and examining new technology based on its costs and benefits. There are problems, both practical and theoretical, with this answer. As far as the theoretical issues, it is usually better to allow private businesses to create solutions to needs such as healthcare since they can be more innovative and more flexible than large governmental agencies. If the federal government designs a healthcare system there will be a tendency to create "one size fits all" solutions, which don't lend themselves to the truth that every person is different and has somewhat different healthcare needs.  Practical aspects include the fact that we presently have a federal government which is far too influenced by powerful lobbies and thus probably can't actually negotiate better prices. Other creative solutions to improve quality with innovative ideas require the ability of lawmakers to work together, listen to each other and develop compromises, which they appear unable to do. There is also a pervasive distrust in the federal government that means that the majority of constituents would likely not trust them to manage healthcare. It would, in fact, be a huge change in how things are done and the road would be very bumpy.

It is very difficult to think our way to a perfect and universal healthcare system. It will require small and sometimes courageous steps in the right direction based on a shared concept of what we want as both providers of healthcare and consumers.  It will require leaders who thrive on working together to find new solutions. It may involve private insurers as well as public and it may even transition to a true single payer. In the end it will need to be a flexible and high quality way to provide good health to everyone at a price that we can afford without pinching the rest of the economy.

Sunday, January 22, 2017

The Affordable Care Act (aka Obamacare) on the chopping block

The Patient Protection and Affordable Care Act (ACA for short, or Obamacare as it has come to be known) was passed on March 23, 2010 after intense wrangling and many compromises. It is a huge and complex bill which changed health insurance costs and availability significantly, resulting in over 20 million Americans getting health insurance who were previously uninsured. Many people can now get health care without impoverishing themselves, but the bill is also not without significant and possibly fatal flaws.

What does it do?
The link here is to a blog I wrote in early 2010 after a grueling 5 hours of reading the bill that was eventually passed. The things people like about it include:
  • Health insurance can be bought through "exchanges" which make it easy to compare plans and purchase insurance. 
  • The wording of policies has to be understandable for regular people. 
  • An insurance company can't refuse to cover a patient because of a pre-existing condition and insurance rates can't be hiked due to being in poor health. 
  • Adult children can remain on their parents' insurance until age 26. 
  • Insurance companies can't stop paying medical costs after a certain ceiling amount and can't kick someone off due to medical problems. 
  • Procedures considered to be effective prevention need to be covered 100%, without a deductible owed by the patient. 
  • Private health insurance is subsidized for people with low income and free insurance is available for people at even lower income through the Medicaid program in those states that have chosen that option. Nineteen of the fifty states, however, have opted out of expanded Medicaid.
  • For most people buying health insurance through the exchanges, health insurance premiums will be affordable due to subsidies.
  • There have been innovations designed to improve both cost and quality.
What's wrong with it?
  • Although health insurance is more affordable for most people and now covers preventative services, it is also required. If the insurance companies have to agree to insure patients who are going to cost them lots of money, they also need to insure patients who won't cost lots of money or their costs will go up and they will no longer be able to make a profit. The requirement to buy health insurance is called the individual mandate and is enforced by a penalty charged on income tax of up to $695 for an individual who has not paid for insurance for a year. The amount of the fine is capped at the cost of the cheapest insurance available. The idea is that you can either pay and get insurance or pay and not get insurance. People don't like being told they have to buy health insurance, especially if they are well. Unfortunately for many of the insurance companies, healthy people did not purchase insurance despite penalties, so many of these insurance companies had to opt out of the exchanges because they lost money.
  • The ACA was supposed to reduce costs overall. Obviously it wasn't going to cost less to get healthcare for many more people, but the overall trend was supposed to go in the right direction. This document from the Center for Medicare Services is interesting. Healthcare expenses as a percentage of our gross domestic product went up, from 17.4% in 2014 to 17.8% in 2015. In 2015 we spent a staggering $9990 per person on healthcare. The congressional budget office predicted an overall reduction in costs. Perhaps it just needed more time.
  • The government assured the insurance companies that it would pay them for any losses under the new plan. The total cost of this was expected to be minimal since insurance companies that did well would pay a portion of their profits to the program. There were more losses than expected, and the Republican dominated congress refused to fund the difference, leading to what was essentially a breach of contract. The stiffed insurance companies are now suing the federal government for billions of dollars. It turned out that health care cooperatives, which were a great idea, had the biggest trouble staying afloat and so the vast majority of those have folded.
  • More patients can now receive healthcare, 20 million or more, but out of pocket expenses and the price of insurance is rising. Before subsidies, health insurance premiums will rise 25% in 2017. Premiums reached over $18,000 for an average family in 2016, though most families still were able to buy affordable policies through the exchanges because of subsidies. 
  • People receiving health insurance through their employers are spending increasing portions of their salaries for their share of health insurance premiums, now over 10%.  Employers pay the majority of these premiums, leading to lower profits and lower worker salaries. This is a continuation of a trend that was present before the ACA passed, but the situation has not improved.
  • Twenty-nine million people are still uninsured. Nineteen states have refused to expand Medicaid. This leaves patients who are too poor to afford health insurance but not poor enough to qualify for regular Medicaid with no health insurance. These people get medical care only in extreme circumstances or pay for expensive care themselves, leading to financial destitution and unpaid bills which hospitals or clinics have to absorb.
  • Some of the experiments to improve quality and reduce costs have introduced layers of complexity to doctors' already complex jobs and this leaves them with less time to spend with patients and with more job dissatisfaction. Physician burnout is increasing, now at over 50%, primarily attributed to administrative duties.
Could the ACA be better?
Yes, for sure. There were many compromises leading up to passage of the bill, despite the fact that in the end it passed without any Republican support. Progressives pushed for a single payer system which would make the federal government the major provider of healthcare coverage. (Actually, in terms of dollars spent, the federal government is the major provider of healthcare coverage.) This could have been done as an expansion of Medicare which is already an established and relatively frugal insurance plan. The government would then have been in competition with the health insurance industry which did not make their very powerful lobby happy, and some physicians balked, expecting a heavy handed approach to what they were allowed to do for their patients. A "public option" was also put forward, which could have provided an optional government funded insurance, but that, too was seen as competing with private insurers and might have become yet another very expensive and possibly budget busting entitlement program. The ACA legislated the creation of the Center for Medicare and Medicaid Innovation to help come up with creative ways to provide and pay for healthcare, but prevented them from using cost-effectiveness analysis to decide what to recommend. This was because of concerns about "rationing" healthcare. The ACA in its original form required the states to expand Medicaid, with the federal government footing all of that cost for 2 years and then gradually reducing that subsidy to 90% by 2020. The Supreme Court found that requirement to be unconstitutional, leaving 19 states to make a short sighted decision to forego a significant subsidy from the federal government and leave a proportion of their poorer citizens without healthcare coverage.

So the ACA could be better by being bigger. It could have entirely revamped how healthcare was paid for by introducing a single payer or provided a good public option. This would not have passed congress and certainly won't now. It might have been great eventually, but would have been very expensive and might have destabilized the economy. The ACA could have explicitly recommended we reduce costs by looking at value and eliminating services with low value. It could have offered expanded Medicaid without state support, leading to more nearly universal health coverage.

It could have been better by having bipartisan support, but, having watched the whole process go down, it's not clear how that could have happened. The idea of universal coverage with an individual mandate was taken straight from various Republican proposals over the last 15 years, and looked very much like the Massachusetts health plan sponsored by Mitt Romney. The ACA did not fund abortion and did not extend Medicaid to illegal immigrants. It provided a waiver for patients based on religious beliefs. There was no funding for talking about end of life wishes with patients due to concern that this might mean we had created "death panels" to decide who would live or die. Still, there was no Republican support for what was very appeasing legislation.

It could have been better by being smaller. Many of the exclusions and exciting new programs which were introduced to make it attractive to legislators also made it hard to understand. Patients to this day have very little idea what the ACA is or even that it is the same thing as what they call Obamacare. Physicians are unclear about its provisions and blame various woes on the ACA that belong to different legislation or to developments not related to law at all.

What will happen to it?
Members of the present administration have vowed to repeal it, but want to hold on to some of the most popular provisions. I have gleaned from many reliable sources that:

  • They would like to make health insurance companies continue to insure people regardless of pre-existing conditions so long as they maintain continuous healthcare coverage. They also want to allow children to stay on their parents' health plans until age 26. 
  • They do not want to continue to subsidize the expansion of Medicaid or subsidize insurance for people based on income. They would consider a refundable tax credit to help pay for insurance.
  • They would like to limit the federal government's funding of Medicaid. Presently the federal government pays a percentage of each state's costs for Medicaid and has significant control over how that money is spent. The Republicans in power favor "block grants" for Medicaid which would provide a fixed amount of money for the program to each state, to be spent as the state decides. This could lead to appropriate economies, but could also lead to states running out of money for programs and cutting funding to vulnerable people. 
  • There has been a proposal to reform malpractice at the federal level, primarily capping what a plaintiff can receive for non-economic damages. This would save money, in theory, by encouraging physicians not to order excessive tests just to avoid being sued. Thirty states have already passed such legislation and some evidence does point to a reduction in healthcare costs.
  • Health Savings Accounts (HSA) would play a part in paying for care, allowing patients to use pre-tax dollars for health expenses. Unfortunately most of the people who have bought insurance through the exchanges are not wealthy and have been subsidized, and so don't have money to put into HSA's.
  • It is unclear what the administration intends to do with regulations on the insurance industry. If they require that insurance companies insure patients with pre-existing conditions who will likely be more expensive, but repeal the individual mandate as they have promised to do, insurance companies might well fail. Patients have become used to getting preventative care without having to pay a deductible, but it is unclear that this is cost saving, so without legislation to require coverage insurance companies may do away with this provision. This is likely to make constituents very unhappy. I have not heard anything about caps on out of pocket expenses or lifetime expenditures. 
  • There is an intention to allow insurance companies to sell their products across state lines, improving competition and therefore reducing costs. This may help, but patients may find that their cheaper out of state insurance doesn't pay for their local doctor or pharmacy or that it lacks protections they had come to rely on.


Bottom line
There is a good chance that the "Obamacare" that we are just getting used to will go away. This will be "the beginning of an uncertain and tumultuous chapter in U.S. health policy" per Jonathan Oberlander, a professor at University of North Carolina and the author of The Political Life of Medicare, in an article in a recent issue of the New England Journal of Medicine. The ACA has been divisive and irksome to Republicans for years and they would have repealed it already if they had had the political muscle they do now. It will be tremendously difficult to deal with the aftermath of that, especially the 20 million people whose access to healthcare will be endangered or lost. None of the ideas that have been mentioned so far come close to managing this. In order to provide access to care that constituents demand at a price that taxpayers can tolerate, compromises will need to be made. The work of improving cost efficiency in medical care, pharmaceuticals and in payment models will need to become a non-partisan issue.

*As a person in need of healthcare, it may be wise to sign up for health insurance through the marketplace before the January 31 deadline, if you are not already insured. The future of these insurance policies is unclear, but it is unlikely that any change in the ACA will affect insurance that a person has already purchased, at least in the short term.


Thursday, January 19, 2017

Conflict of Interest in Medicine--Why should we care?

This weeks issue if the JAMA (Journal of the American Medical Association) reads like an expose. At least 3 of the research articles do. So exciting. I don't want medicine, my field, to be ethically unsavory, but it is sometimes. It makes me proud to see that it sometimes polices itself and that such information is published in a high profile journal.

The first article is entitled "Patient Advocacy Organizations, Industry Funding and Conflict of Interest" by Susanna Rose of the Cleveland Clinic along with colleagues of hers from the University of Chicago. It turns out that 67% of  patient advocacy organizations such as the American Diabetic Association, the Multiple Sclerosis Foundation and March of Dimes, organizations that support patients with various diseases, receive support from industry. Specifically "industry" means organizations that make money by selling products related to health. More than one in 10 of these organizations received over half of their support from industry. Nearly 8% of the leaders of advocacy groups surveyed admitted to feeling pressure to conform to the wishes of their corporate donors. Since this is a hard thing to admit, that number probably vastly underestimates the true impact.

The Institute of Medicine has written extensively on conflicts of interest and how to manage them. Financial conflict of interest occurs when the primary aim of an organization, in this case to advocate for patients' best interests, is in competition with a secondary goal such as promoting a product for a company that pays your bills. It is hard to quantify just how these conflicts of interest play out. Big drug and device companies have tremendous amounts of money, expertise and resources to strengthen an organization, but they also are primarily motivated by making money. If they wish to sell a product that is of questionable benefit to patients, an advocacy organization could be a powerful ally in marketing. Patients think of their advocacy organizations as representing their interests, sometimes in opposition to the medical establishments. There are no disclaimers for them to read such as "this organization supported by the makers of patented titanium bone screwdrivers or magic diabetes-be-gone pills."

The next article by Dora Lin and colleagues from The Johns Hopkins School of Public Health looked at the organizations and individuals who argued with the US Centers for Disease Control's (CDC) guidelines for prescribing opioid pain medication for chronic pain. Unless you have lived under a rock, you have probably observed that prescriptions for pain medication in the opiate class increased dramatically for several years, followed by all of us noticing that there was increasing numbers of patients addicted and also dying of overdose. In response to this problem healthcare advisory groups have recommended prescribing these drugs less often, at lower doses and discontinuing them sooner along with offering non-opiate options for pain control that are less dangerous and probably more effective. When the CDC's recommendations came out there were criticisms and so there was a period of invited comment before the final release. It turns out that the majority of criticisms came from organizations with ties to opiate manufacturers and none of them mentioned this in their comments. There are many reasons for the US opiate epidemic, but misinformation propagated by the pharmaceutical industry was definitely an important one.

The third article was even more concerning from a financial standpoint. In the last few years we have seen major changes in the way we treat hepatitis C and elevated cholesterol levels. Guidelines released in 2013 by the American Heart Association recommended that we extend the number of people who will be treated with cholesterol lowering "statin" drugs to anyone with a 10 year risk of atherosclerotic cardiovascular disease (heart attacks and the like) of over 7.5%. Guidelines released in 2015 for the treatment of hepatitis C, a chronic liver disease caused by a blood borne virus, suggested that we treat everyone with hepatitis C with extremely expensive drugs which, kudos to pharmaceutical researchers, can cure the disease.

The price tag is the reason that this last article (by Akilah Jefferson and Steven Pearson of the National Institute of Health and the Institute for Clinical and Economic Review) is of greatest concern. Statin drugs, which are definitely good for some people, especially those with known heart disease, are set to reach over $1 trillion in worldwide sales by 2020. The new hepatitis C drugs can run over $1000 a pill, or $80,000 and up for a treatment course and will account for about 10 billion dollars of healthcare spending in 2015. It turns out that a significant number of physicians in both of the groups who were responsible for developing these guidelines had support from the manufacturers of the drugs they directed to be used so extensively. The Institute of Medicine made some pretty clear recommendations about conflicts of interest in 2009 and neither of the organizations responsible for producing these very influential guidelines followed these recommendations.

So it's good that we are talking about this but not good that it is happening. The problem with conflicts of interest isn't that they necessarily lead to bad decisions, but that they probably do and that we don't know. We as physicians try to do good, and we've been told in the last many years that we can do the best for our patients by following guidelines. These guidelines, we are led to believe, are based on the best of scientific evidence and, lacking the time to read all of the literature and keep up with the astounding amount of new data that comes out every year, we would do well to follow them. But if the people who create the guidelines work for the companies that stand to benefit financially from the outcomes of those guidelines, we would do better to question them. At the level of populations, the decision to recommend that all patients receive a treatment rather than a smaller group of patients who would more clearly benefit makes a huge difference. Our individual budgets as well as our nation's budget for healthcare are limited. A choice to use an expensive medication is also a choice not to do something else that might benefit us more.

Conflicts of interest are common and part of the human condition. It is not possible to entirely eliminate them in any situation. In cases such as guideline development and patient advocacy groups in which patients are vulnerable to influences which do not have their best interests as a guiding force, we should be especially sensitive. Physicians should try hard to recuse themselves from making important decisions in which they have a conflict of interest. We should honestly recognize that bias in the form of industry connections may make it impossible to be truly objective.

Friday, January 6, 2017

The 21st Century Cures Act--allowing drug companies to speed up development of drugs that may not work

Early in December Congress came together in bipartisan support of HR 6, the "20th Century Cures Act." So unusual, these days, for a "landmark bill" to pass into law without major objections by Democrats or Republicans. Perhaps something fishy was going on. Perhaps this was a chance to please special interests while making the average voter feel that, at last, congress was going to accomplish something good.

The bill was hailed as supporting the development of new drugs and devices to cure dread diseases by reducing unnecessary regulation by the Food and Drug Administration. I found the text. It is amazingly difficult to read. The legal terminology is nearly impenetrable and the actual content is pretty hard to discern. It is also full of barely related measures, some of them excellent and some of them likely to have nasty consequences. I am particularly wary of the provision that encourages use of digital medical imaging by paying less and less for tests done with older x-ray machines, the one that allows pharmaceutical companies to pay for doctors' continuing medical education and the one that excludes approved generics from calculations of average manufacturers' price for drugs. I am perplexed by the creation of a 14 person working group specifically to address Lyme disease and other tick-borne diseases.

An excellent commentary by Aaron Kesselheim MD, a primary care physician with a law degree and special expertise in the ethics of pharmaceutical research and sales, discussed the many problems with this legislation. He is particularly concerned that the shift toward haste in approving new drugs will lead to new and expensive drugs that will enter the marketplace without convincing proof that they actually work. The FDA, at its inception, was instrumental in reducing the number of quack medicines on the market and inspiring trust in newly invented products. The bill will encourage the use of data which may be less accurate than what is presently required.

We do need more and better drugs to treat the conditions that make us miserable and shorten our lives. The US has been at the forefront of the world as an inventor of innovative products that save lives, though often at astronomical prices. The US was responsible for developing anti-viral medication that has allowed us to actually cure hepatitis C, a disease that often leads to endstage liver disease. The drug manufacturers charge $40,000 for a course of these medications, and many of those who have the disease are either uninsured or underinsured. We have come up with cancer chemotherapies that are less toxic and make metastatic cancer, which was once a death sentence, into a treatable disease, but they are oh so expensive. We have also made some terrible drugs. We have produced drugs for high blood pressure that don't reduce the risks associated with it, drugs for pain that have been pushed to the extent that huge numbers of Americans have become addicted, medication for bladder urgency that makes the mouth dry, but barely changes a person's urgency or incontinence. We have produced injectable medication for cholesterol which does reduce serum levels, but is not yet known to save lives or improve health. This can cost over $10,000 per year. I don't think we want to allow pharmaceutical companies to enforce their own ethical standards.

The bill was also roundly praised for a provision that was supposed to fight the opiate epidemic. Again, I find the text of the bill to be difficult to understand, but it appears to be pretty anemic. From what I can glean, it allows insurance companies to cut off payment for drugs of addiction to patients who are felt to be at high risk of prescription drug abuse. In addition these people must receive information on drug and mental health treatment programs which are federally funded. It does not have to actually provide this treatment. Dr. Kesselheim says there is money for grants to the states to reduce opioid abuse and to reorganize mental health care delivery, but I found nothing like that in the text of the bill.

The bill does provide better funding for the FDA, which is good, because with sequesters and budget cuts, the financial support for funding research through this agency actually went down 22% from 2004 through 2015, according to Dr. Kesselheim. The costs of this program will be paid for by selling off some of the US petroleum reserves and from cuts in the prevention and public health fund of the Affordable Care act. That doesn't sound like a good choice.

Overall, it is not clear that the Cures act actually cures anything. It will increase funding to the FDA and may streamline approval for innovations, but we will be less sure that those innovations are really useful. Congress may have passed legislation that gives drug and device manufacturers a pass to make products that are painfully expensive and may not work.