Health Business Blog

The New York Times Bits blog has one of the better articles I’ve read about caregiver robots for the elderly. The aging population plus fewer family caregivers, fewer available human aides and relentless advances in technology are making the routine use of robotic assistants for the elderly all but inevitable.

One way or another we should expect to see robots enter the home to take care of the elderly. Certain tasks are less controversial. For example, a robot that clears dishes from the table, loads them in the dishwasher and then unloads them when they’re done isn’t that big a deal. That’s only a step or two beyond what a dishwasher does today. But even there you encounter issues of learned helplessness. If the robot can do it, why make the effort, even if effort is what provides purpose in life and staves off physical and cognitive decline?

Then there will be robots that keep track of medications and encourage people to take them on time. Those are probably good, even for non-elderly patients, because they could help boost adherence, reduce medication administration errors, and order refills in a timely manner.

It gets a little spooky when we start thinking about robots that do personal tasks, such as giving baths. And what about robots that act human to engage elders in conversation? It’s pretty clear that a lot of patients develop a relationship with such creatures, especially if they are dressed up like humans or have a human voice. On the one hand that’s a great relief to a remotely located adult son or daughter. The parent will have someone to talk to all day who keeps his/her patience and has plenty of time. But there can be feelings of guilt, too, as the son or daughter realizes they’ve delegated something critical to a machine and may even be unwittingly tricking their parent into thinking it’s human.

Things get even dicier when robots are used to monitor activities and behavior, which may lead to resentment by the parent and loss of autonomy.

I think we’ll just need to get used to these issues and work through them and that if we do so we can get to a generally happier place. The typical model I’ve seen of elders spending their last years accompanied by hired caregivers can sometimes be wonderful, but often has serious downsides.

If and when I get old and am on my own, I’ll be ready for my robot or robots.

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This is the transcript of my recent interview with Harvard Pilgrim’s CEO Eric Schultz. An audio version is available here.

David E. Williams:  This is David Williams, President of the Health Business Group and author of the Health Business blog. I’m here today with Eric Schultz, President and CEO of Harvard Pilgrim Health Care.

Eric, there’s a lot of discussion these days about consumer engagement. What is consumer engagement and what is Harvard Pilgrim doing in that area?

Eric H. Schultz: I agree, David. Consumer engagement is finally starting to get real traction. It has been a bit of a third rail because so many parts of consumer engagement speak to the individual role and individual responsibility.

That doesn’t mean that we’re where we are with health care cost and quality because the consumers have failed to do something, not at all. But I think some policymakers, some elected officials might be concerned that the term consumer engagement is putting some sort of blame on consumers. And that’s not it at all.

The other piece I would mention upfront, just to get the language out of the way is I recognize that some actors in the health care system just don’t like the word consumer.

And I think what they’re getting to is that health care and wellness is very personal, it’s human. It’s not buying a refrigerator, and we understand that. Calling someone a health care a consumer is not meant to be disrespectful. It’s hard to imagine what more important decisions any one person can make.

But I would just lay that out and so when I speak about consumers, I mean no disrespect. There is a place for that word. There also is a place for the word patient. Maybe it’s informed patient rather than consumer. But let’s put the language off to the side.

The good news is that consumer engagement is getting real attention at the front line. Up until this point, we were seeing more attention being placed on the provider contracting strategies, moving away from fee-for-service and more toward payment for value, not for volume. And that’s essential for us in the United States getting our arms around more efficient care, more effective quality of care.

But that, in and of itself, is absolutely insufficient for the U.S. to get where it needs to be, because in some cases there are providers with great market power, great brand power, and great geographic control. They really don’t have the same reason to reduce their cost or invest in how they deliver care to reduce the cost of care.

That’s why we need this counter force, which is where the consumer comes in, to reward those providers that are doing a great job on cost and quality and frankly, to threaten those providers that are very costly. They may be high quality but don’t have the pressure yet to invest to become more cost-efficient.

So it’s a dual kind of strategy and it’s very welcome.

I’ve always felt that there are two ways for us to get control of cost trend. One is for the government to set rates, which I don’t believe is effective in dealing with trend over the long haul. And the second is for the market to work. And in United States, although some people say the market approach to health care has failed, I say the market has never been tested.

We all know, in a market, you’ve got supply, you’ve got demand and you’ve got price. Even today the price is largely separated from the demanders. There are oligopolies and monopolies and everything in between where your demanders of service don’t have to know how much things cost. And therefore we don’t have the regular market rules applying. This is a nice way to get that started.

There are really two major demanders. The first one that comes to mind most readily for most of us is the patient, the consumer. We demand care. The second is less obvious to those of us who are not in the business, clinical or otherwise, and that’s the referring physician.

There is value in physicians having transparency, especially for primary care physicians and a handful of specialists that have the responsibility and the authority to refer patients to other institutions or clinicians. And yet, even they don’t know how much these services cost nor do they know the quality. They may think they do, but it’s anecdotal, because that’s how we’ve always run this business as physicians. They need the information.

So it’s nice to see consumer engagement happening and it’s nice to engage the demanders in a way that’s going to really have an impact on the supply and on the price of the supply.

Williams:  Much of the recent discussion about consumer engagement focuses on transparency and specifically, price transparency. What is Harvard Pilgrim doing in that area?

Schultz: We’re very actively involved in price transparency. I will tell you that it’s been a journey. A worry of mine early on –and I’m past this point now—is that price transparency was occurring before there was quality of care transparency.

Even with value-based insurance plans that act an important reason or incentive to use information to make decisions, if we, as consumers, know the cost of something and we don’t know the quality of it, the majority of consumers believe that if it costs more, the quality is better. So I think we were creating a tension that insurers wanted members to go to lower quality providers to save money.

The other problem I had early on was that when you make prices that we’ve negotiated to pay physicians, hospitals and others available to the public, those providers who are being paid less are going to end pushing for more. And those who are being paid more, they’re not going to volunteer to get paid less.

So all boats rise, and I was worried that the prices were going to rise. In fact, they did rise after the Attorney General came out with the report, which I’m glad came out. It’s an outstanding report and I wouldn’t have it any other way. I’m glad she did it and it’s been very helpful.

But there’s been this evolution of thought. Now, I’m much more comfortable with being transparent on price because we’ve started producing better quality data at the provider-specific level or group level. So we’ve got some of that being balanced in.

And the other thing is that the real thought leaders, whether elected officials, business leaders, or others are being much more open around the role of consumer engagement and we have a lot of studies out there that have shown that just because it costs more doesn’t mean the quality is better.

So we’re moving forward aggressively in making cost and quality at the provider-specific level available to our customers and even more importantly to have it available with benefit-specific implications, because as you know, high-deductible plans have become very common.

They’ve grown quite a bit here in Massachusetts and in New Hampshire and Maine where we operate. More and more, our members are at risk for big costs. Now we have information that helps them make decisions that are going to complement their benefit plan designs better.

But it’s hard to know, with a $2,000 deductible, how much is left. If I have to go for an MRI and one is $1,900 and the other is $850, how much am I going to have to pay out of pocket, given whatever deductible is left? It’s complex.

So it’s really important to have tools that provide information that is person-specific with the benefits that you have. And that’s exactly what we’re introducing in the marketplace in September called Now iKnow. It’s a tool that we’ve branded that has “Castlight Inside” which is a play on Intel Inside. Castlight has a great software technology that helps us bring it to the market quicker.

The bottom line is to make more and more information available to complement the value-based insurance plans that we have, to complement tiered networks that we’re offering, and to put the consumers in the driver seat.

We want them to feel more control than they had back in the ’90s when managed care really took a black eye because there weren’t choices. People didn’t feel like they had the control in so many ways. And that’s really what guides our thinking around transparency: empowering individuals with the information and the tools to make more informed decisions that work for them or their family member.

There’s another interesting thing around transparency that we’ve identified, what we call aided transparency. One thing we know for sure here at Harvard Pilgrim is that this is definitely a journey that consumers are on. The notion of giving an individual information –even if it’s easy to access—along with value-based insurance plan designs, is a big shift on how people access care and think about paying for it.

Aided transparency is really a transitional phase where we help individuals use the information. We have nurses that help individuals who use information along with their benefit plan designs. This is in a product called SaveOn.

The idea behind SaveOn was to focus on those services that are easy to identify and where there is a huge swing in negotiated rates and a negligible difference in quality of care.

To no surprise, high-end diagnostics like MRIs and CT scans and high-volume diagnostics like colonoscopies are the focus. These services have grown over the last decade because hospitals and large multi-specialty group practices, have pursued very deliberate revenue strategies and they’ve been really successful.

The number of MRI machines out there in any given marketplace is outrageous. It’s overkill. But there’s never been a connection between demand and price and supply, so it’s worked. What we want to do now is provide an incentive to our members with SaveOn. If they are referred by their physician to get an MRI, we educate them that they can call our nurses.

If my doctor wants me to have an MRI of the spine, our nurse will look online and offer alternatives that are lower cost within that driving time.

Now you’d think that okay, that’s fine. But this is where the real value and nuances fall in place. If the members do this and they go get the care at the other place, we’ll pay them up to $75. So this is the first time we are keeping the benefits the same and paying a reward for making this choice.

The second thing and this is the aided piece, we’ll also say to Mrs. Jones, would you like us to call your physician? Would you like us to call this new facility and set up the appointment for you? Would you like us to call the other and cancel?

We address those administrative burdens and discomforting conversations you might have with your doctor. So many people don’t want to disagree with their physician; with our help they’re more likely to do it. It’s amazing. All of a sudden you feel their shoulders just dropping when you’re on the telephone with them because these issues have been a real barrier.

The other thing if a patient calls and it turns out they’re already  going to the most cost-effective provider we will say, “Mrs. Jones, thanks so much for calling. You’re at the best provider for cost and quality, but we’ll send you a check for $10 just for calling in.

We want to reward people, we want to help them get rid of some of the barriers. That’s the aided transparency that I’m talking about that we have to be ready to continue with. We don’t want to push the consumers too far too fast so they throw up their hands in frustration and then this strategy falls apart.

Williams:  You mentioned you see two fundamental approaches to cost containment, a government approach or a free-market approach. It seems in Massachusetts we have a hybrid. With recent health care reform laws, the government is taking some steps to require transparency. How does that fit in with what you’re doing? And is what the state government is doing helpful or unhelpful?

Schultz:  In Massachusetts, the state’s role has been largely helpful.

The role of the government can be to catalyze action, which has been really good. They don’t want to overly prescribe what things should look like. They want to see how the market can produce something because with competition, we’re desirous of having the better tool. And they want to take advantage of that. But they want to know that they’re pushing the industry to move in a direction that makes sense and where we all know it needs to go.

So Chapter 224 last July had a requirement to have insurers produce a tool to support transparency. So I think that’s been really good.

Another example of support from the government is to drive the conversation away from fee-for-service toward fee-for-value. That’s made a big difference. Providers, in particular, hospitals  have responded. We’re seeing medical trends well below four percent; and it’s really the hard collaborative effort between providers, physicians and insurers responding to the invisible (or not so invisible) hand or of the regulators.

Those are two good examples, where government is making a big difference.

The area where I think we need greater movement is in requiring hospitals to produce a standard set of quality measures on a more real-time basis.

A lot of data is used from Medicare reports and some other standard reports, but it’s not enough. Consumers should have access to that. The hospital level is a start, but we all know we’re moving toward a combination of physician and hospital department information; we have to get there but that’s down the road. So I’d like to see more movement to get better quality data. We’ve got a ways to go.

Williams: You mentioned two types of demanders, patients, but also referring physicians. You’ve been describing a lot of activities and initiatives that you’re undertaking for the consumers. What about for those referring physicians? Can these same tools be use? Are there other tools that you’re using to help the referrers?

Schultz:  We’re more advanced with our tools for the consumer to begin with. We do provide some information for our physicians about the cost of specialists and the cost of hospitals. We have a long way to go in that arena, though.

I know that tools, which will be in the hands of the consumers, will automatically have an influence on the referring physicians. My preference would have been –if the technology were there– to give the physicians, especially the referring physicians, the same tool at the same time. That’s where I would want to be if I were the physician.

The bottom line is the first phase was available for the consumers and I said let’s get that out. Let’s not wait for both or perfection. The good news is that Harvard Pilgrim insures a large number of the physicians in the state. They are members of ours and they’ll have the tool.

What we’re talking about here is only one slice of the pie, which is how we use the tool for acute services. We’re not talking about health and wellness. But transparency and value-based insurance have a big impact on our choices as consumers to be healthier. That’s probably a different subject than today’s discussion about price and quality transparency.

But even when in making decisions about health and wellness, we want people to select physicians who have high scores, partly because they’re focused on how they keep their patients well. Do they manage all of their diabetics well? If so the scores would reflect that. So their higher quality scores will be partially a reflection of how they help their patients manage their health.

Williams:  You mentioned that you chose Castlight in order to get to market sooner. But not many health plans are using it. In fact, you may be the first one. Are there any barriers to plans bringing Castlight on and do you see other plans following in your footsteps?

Schultz:  We were the first health plan to select Castlight. I suppose for some payers it was a little bit unsettling because Castlight is going directly to large employers and selling this feature that creates competitive pressure on insurers.

Our thinking here is first, we wanted speed-to-market. We were moving forward with the strategy before Massachusetts passed the law. So we were going to be fine anyway. We look at a number of products that were already existing and we felt this one was the best one that was out there.

We are glad we had the opportunity to brand it uniquely to our health plans, so that helped to deal with some of that concern about competitive pressure. Another health plan in the marketplace, Tufts, is using Castlight. I think they’re using it under the Castlight name.

There’s always a little bit of concern, but the greater value of bringing this to our customers won the day.

Williams:  I’ve been speaking today with Eric Schultz, President and CEO of Harvard Pilgrim. Thank you.

Schultz:  Nice to be here.

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HarvardPilgrim HealthCare, which has been ranked as the best health plan in the US for the past nine years, is taking new steps in the areas of consumer engagement and price transparency. It recently became the first health plan to select transparency vendor Castlight Health to provide patient-specific price information.

In this podcast interview, CEO Eric Schultz discusses the “journey” the organization has taken on price transparency, why they decided to work with Castlight, and the state of transparency tools for referring physicians. Schultz describes the concept of “aided” transparency to help consumers transition from established approaches to more value-oriented behavior, and explains HarvardPilgrim’s new Now iKnow and SaveOn initiatives.

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By David E. Williams of the Health Business Group.

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David Williams interviews Harvard Pilgrim CEO Eric Schultz Play Now | Play in Popup | Download

Hospitals and health systems are always looking to boost brand awareness and attract new patients, so it’s not surprising that some sponsor high-profile medical screening buses to get the word out and bring patients in. I’ve always been dubious of this approach, which reminds me of garages that offer free 150 point inspections as a benefit to customers.  Obviously the garage expects to make back any cost of the diagnostic by uncovering new problems to treat. Hospitals aren’t that different.

There are downsides other than cost to unnecessary screening tests. Positive results can lead to invasive, dangerous and expensive follow-up tests along with anxiety.

One organization, Health Fair runs buses in the Washington, DC region that offers a package of five tests for $139. The US Preventive Services Task Force recommends against all five of these tests. Abnormal results of one kind or another are found in almost half of all patients screened. You can bet a whole lot of those are false positives or minor issues that are best ignored.

I’m gals to see Kaiser Health News go after this kind of story so people are aware that what looks like a friendly, innocuous service may be something less positive.

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By David E. Williams of the Health Business Group.

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My perception is that doctors in previous generations were more likely to devote their entire lives (professional and “personal” time) to the practice of medicine. Today’s doctors are more likely to consider lifestyle and not automatically put everything into doctoring. This is partly cultural –as younger professionals in general have put more emphasis on balance– but a large part is structural, because residents are working fewer hours by law and because more doctors are working for others, which encourages an employee mentality.

I don’t really have a problem with doctors who want to have a life outside medicine, but overall I prefer to be treated by someone who’s really dedicated and wants to devote most of their waking hours to it. By the way I feel the same about other professionals I work with.

So I’d like to see some of the structural issues addressed to encourage those who want to go all out to do so. Kaiser Health News has an article on the topic today (Doctors Transform How They Practice Medicine), which gets at my point at least indirectly. The article discusses how physicians are opening “medical homes” to provide more coordinated care or opening concierge-style practices that limit the number of patients and charge extra fees.

Those are both kind of interesting but also a bit ho hum. I’d rather see a broader array of offerings including those that include more remote services and incorporate specialty care. I hope and think they’ll come because despite the fact that many docs are rushing into hospital employment, I believe many would rather work for themselves if there were a viable way to make it happen.

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By David E. Williams of the Health Business Group.

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People with cancer are more than twice as likely to file for bankruptcy as those without, according to a new study in Health Affairs. Medical expenses can be high even for those that have insurance, thanks to co-pays, deductibles and non-covered services. In addition, many cancer patients can’t work so aren’t earning income plus they may have other non-medical expenses like child care and transportation.

Don’t expect a government policy solution anytime soon. So do your best to obtain health insurance and disability insurance and to set aside a rainy day fund.

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By David E. Williams of the Health Business Group.

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Mid-sized, low wage companies will feel the effect of Affordable Care Act (ACA) implementation. Currently, many of their workers are uninsured but that is meant to change next year. Health insurance will be an added cost for these employers, but government subsidies will soften the blow.

Opponents of the law have been making a big deal out of how it will harm businesses and stop their growth plans. But even though today’s Wall Street Journal article (Eateries Fear Health Law’s Bite) starts to take us down that well-trod path, if you read it closely you’ll see there’s little to fear.

The article leads off describing East Coast Wings & Grill, which is temporarily limiting its franchisees to ownership of 3 to 5 stores due to uncertainty about whether the stores are viable when they need to pay for insurance. The International Franchise Association shares survey data indicating 72 percent of franchisees say the law creates “some” or “significant” uncertainty for long-term planning. Rat burger purveyor White Castle is also planning to slow down its expansion.

Overall it’s a pretty feeble argument against ACA expansion. Certainly there are other things prospective Wing operators and franchisees in general are uncertain about, including the cost of food and how the sequester will impact the economy. It’s convenient to blame the Affordable Care Act for a chain’s problems. But if it weren’t that we might be hearing some other explanation, like bad weather.

Interestingly, the more well-established chains don’t seem overly worried about ACA. Wendy’s, Dunkin Donuts and McDonald’s are all aware of ACA and making plans for the modest impact it is likely to have.

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By David E. Williams of the Health Business Group.

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Generic drugs have been an effective cost containment solution for traditional, small molecule pharmaceuticals. As large molecule biologics proliferate and take up a growing share of medical spending, we also increasingly need cost containment.

The path we’re on now in the US and Europe is to ape the experience with small molecule products by introducing generic versions as patents expire. As I’ve discussed in the past, this is a bad idea. Development costs are high, manufacturing is notoriously difficult, and the products won’t be identical anyway. That’s why the products are called “biosimilars.” As a result the products are going to be expensive –we won’t see nearly the costs savings as we do with small molecule products, and FDA will be stretched too thin monitoring the manufacturing facilities. Instead I propose to allow branded products to maintain their monopoly after patent expiration, but to regulate pricing.

Recently I’ve been thinking this through a little bit more and have become even more troubled by the idea of biosimilars. In particular I’m concerned about the ethical and practical issues of conducting clinical trials for these products.

Patient recruitment is a challenge for most clinical trials, and as a result studies are frequently delayed. A key problem is that few development-stage therapies offer significant improvements over what’s already on the market, so there is limited enthusiasm to participate in a study that has little reward but also includes risks. Doctors don’t feel comfortable recommending that patients enroll, and patients are understandably hesitant, too.

The challenge for bio-similar trials will be even harder. It’s hard for me to understand why a patient would want to join a trial just to help prove that a new therapy is very similar to an existing therapy. I suppose it’s possible that a biosimilar product could be a little better in specific instances, but mostly these trials will just attempt to prove a new drug is the same as the old.

The ethical issue is related to the practical one. If there’s no upside to joining a trial, is it reasonable to ask a patient to take on any extra risk, such as the risk that the product doesn’t work or makes them sicker? I kind of doubt it.

At the end of the day, I feel more strongly than ever that biosimilars and biogenerics  are a foolish and pricey prospect.

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By David E. Williams of the Health Business Group.

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Older people with short life expectancies often receive aggressive, expensive treatment for non-threatening skin cancers, receive little benefit from the treatments, and experience inconvenience, side effects and complications. This news is hardly surprising — I’ve written before about people with low life expectancies receiving unneeded screening and treatments (The overuse of mammography in elderly women with cognitive impairment) — but it’s disturbing.

The JAMA article indicates that only three percent of these cases were not treated. To me that indicates three things: a general bias toward action in American medicine, a special fear of cancer, and the financial incentives to perform procedures. I agree with the NY Times suggestion that we use the term “abnormal cell clusters” rather than cancer, since they are so unlike other more dangerous cancers.

It’s worth keeping situations like this in mind when considering how to restructure Medicare, which will be necessary in order to get the federal government’s finances in line.More cost sharing and the promotion of shared decision making for conditions like this would be a good first step.

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By David E. Williams of the Health Business Group.

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This is the transcript of my recent interview with Cancer Treatment Centers of America CEO Steve Bonner.

David Williams: This is David E. Williams from the Health Business Group. I’m speaking today with Steve Bonner, CEO of Cancer Treatment Centers of America.

Steve, thanks for joining me today.

Steve Bonner: You’re very welcome, David. It’s great to speak with you again.

David Williams: What is Cancer Treatment Centers of America and how does it differ from other well-known cancer centers?

Steve Bonner: Cancer Treatment Centers of America is a growing chain of hospitals that specialize in and treat only cancer. We tend to see later-stage, more complex patients, because they get the diagnosis and stay at home until it becomes more complex. At that point they then, go looking.

We have as comprehensive and complete an array of technology and talent for traditional cancer therapy under one roof as you can find anywhere. What really sets us apart is our commitment to a holistic and an integrated style of care. The traditional therapy treats the tumor but cancer is not the tumor, it’s the malfunction of the basic immune system. Therefore we provide a very robust array of complementary therapies, which include nutrition plans, naturopathic intervention, mind and body medicine, spiritual support, exercise, Reiki, yoga, Pilates and pain management, which includes acupuncture as well as more traditional methods of pain management.

We integrate these therapies for every patient in a way that you  don’t see elsewhere. If you go to the finest cancer providers, you’ll be able to see a great medical oncologist and a cancer-trained nutritionist and naturopath. However, those professionals will never talk to each other. We structure a team of those professionals around each patient and that team stays with that patient throughout  the course of their treatment at  CTCA.

David Williams: I’m curious about how you think about the definition of quality in patient care because  a more holistic and integrated approach, is more difficult to measure.

Steve Bonner: Exactly. Our corporate DNA is grounded in the philosophy of patient-centric care. Of course, everybody says that, but we were created by an international merchant banker and a libertarian whose mother got cancer. Our founder set out to create something that structurally keeps us focused on the patient. As a result, when it comes to quality, the question we keep asking is, for each patient, what is the patient’s definition of quality and how are we doing in achieving that?

We have our own extensive measures of the quality of the experience. We measure and publish data from the patient point of view, using a Bain Net Promoter Score and also do the conventional Press Ganey Measurement. – We also include HCAHPS, Leapfrog and many others.

We believe that as an industry, we have a long way to go to really understand quality from the patient’s point of view. When we talk about HCAHPS and Leapfrog, they’re useful, but they’re more for the industry’s point of view than the patient’s point of view.

We have two major initiatives that are underway to try to help us better understand quality measures and then provide information about quality that we think can lead to some breakthroughs. One is a new piece of research that we’ve just released called the “The Cancer Experience”. It is a national study of patients and caregivers. The Cancer Experience is composed of a thousand cancer patients, a thousand caregivers, and family members of cancer patients all of whom are people who have been treated in centers across the country. This isn’t specific to CTCA patients although our patients are included.

The headline of this study that was surprising to us is that one in four of these patients and caregivers are dissatisfied with the care that they’ve received across the US. We note that 20 percent of these patients have left the place they went first for care and have gone somewhere else as they try to find the quality of care and the price of care that matches their expectations.

The survey goes on to point out that there are three major events or elements of care that really drive the dissatisfaction. The first is that patients know how complex the disease is, know how complex the treatment is going to be, and know how  challenging it’s going to be to understand it.  They expect and want us to provide them with a care quarterback the minute they come into the hospital that can stay with them throughout their care. A person that understands their disease understands what we can do and can help them navigate the system.

The second issue is that patients want an integrated care team to make sure that they get care for this disease that addresses the mind, body, and spirit, not just the tumor. The survey told us that 86 percent of the patients and caregivers wanted an integrated team, but fewer than 70 percent actually were able to have one.

The third major driver of this dissatisfaction is pain management.   It is easy to imagine how important that is to a patient and to a caregiver.  It was interesting that the caregiver actually felt more strongly about pain management than the patients did. Half the population in the survey said they did not get the pain management that they needed and wanted to allow them to be able to navigate their treatment and get to the best possible outcome.

The other major activity that we’re involved with is to try to help the industry and help us understand quality from a patient’s point of view.  In response to this we’ve created a partnership with the National Patient Advocate Foundation, which is not-for-profit. We’re underwriting a piece of research that will be presented a year from now, next April. It is another survey of cancer patients and family members that will allow them to define the cancer value index in their terms.

It’s basically  trying to create the JD Power of oncology, where the association of research will conduct this research, they’ll publish the research and then, they’ll continue to manage it in a way that will allow providers to give them our performance information. They can then publish it in a way that will make it much more comparable for patients and allow them to more intelligently navigate the industry as they seek a combination of quality, price and as a result, value.

David Williams: I’d like to ask you more about the role of competition in terms of improving quality. You mentioned that your founder comes from a libertarian background and merchant banking. And of course you’re a for profit organization. In lots of places in the economy, competition drives quality, performance and value but not necessarily in health care. What role does competition play in driving quality in health care, both in oncology and more broadly?

Steve Bonner: Competition is one of the most powerful drivers of quality, cost and value that is available to us. An empowered consumer with choice will walk, talk and teach us what real value is. If we then compete based on those terms, we’re going to see quality naturally go up and price naturally come down.  Even in health care today — LASIK or elective plastic surgery — where it’s up to the patient to decide and pay you see continued improvement in the quality and in the technology. And you can see the price continuing to come down.

The way we’ve constrained competition in health care is a major factor in how expensive care has become and how elusive true quality is. That’s part of the reason we’re sponsoring these two significant efforts to engage the consumer to teach us how they want to define quality.

David Williams: In most markets, including ones you’ve described, there’s usually a market price for something, and the supplier sets their prices and customers either pay it or they don’t. Health care is also a little different where you have commercially-insured patients and you have Medicare and Medicaid patients. Medicare,  in particular, will tend to pay a lot less than what the commercial patients are paying.

In an area like oncology, what impact does that have on providers and on patients? What are the policy implications of this often wide disparity between the commercial reimbursement rates and what government programs are paying?

Steve Bonner: The implications are profound. I may back up a step and say that if we want competition to control the market, then we have to enable that competition with much better information, including information about price.

David Williams: Let me ask you about the recent Reuters Special Report that I’m sure you’ve seen. It was taking a look at your company’s claims that survival rates are higher for your patients than for other patients. It concluded that those claims couldn’t really be substantiated because there were differences in your patient population versus those you were comparing it with. Can you just provide some commentary on how you look at this issue more broadly and address some specific questions that came up in that Reuters Report?

Steve Bonner: We heard that these reporters were working on a story and we reached out to them and invited them to include us in the dialogue, which ultimately they did at some level. We invited them to come and visit our hospitals and talk to our patients and  understand the patient experience, which was part of what they were writing about. We explained to them what we’ve done with the publication of our outcomes and the rationale behind it and the evolution of it going forward.

We did tell them that all the data that we published on our website on outcomes is vetted by an independent research team at Washington University and offered them the opportunity to talk to the research team. They declined to come and  look at it. In my opinion, they wound up drawing unsustainable conclusions and making observations that simply aren’t supportable as they presented them.

We’re either the first or the second or the third in oncology to put any outcomes data on our website — but we publish all the outcomes on analytic patients who come to CTCA. These are patients who had not been treated elsewhere. We publish that by length of life, quality of life, match to location and stage of disease. It’s very clear that’s what is published.

The other way to come at it is what we don’t publish. We don’t publish data on the patients who have been treated elsewhere before they come. The question is why, and the reason is because we haven’t so far figured out a good frame of reference to offer people. With analytics of the disease, we have the SEER and NCI database and that’s what we use as a point of reference.  We think it’s fairly comparable to this segment of our patient population.

Where we have a fourth-stage pancreatic cancer patient who also has diabetes and a heart condition and has been treated in some very unique way in two or three organizations, to just publish their length of life data, we don’t think would be helpful to patients. We haven’t published that. We’re in the process of relooking at that and maybe we just need to put that out there and then, we’ll take on the questions as they come.

Some of the organizations that the reporter quoted in criticizing our methodology are organizations that so far had not published one statistic with respect to their own outcomes. They don’t publish HCAHPS data. They don’t publish Press Ganey data. We ask ourselves how valid and relevant and reliable are these as critics?

We do have a unique population and that’s a fair observation. We talked about the major elements of it. They are very engaged patients. Most are patients who have been diagnosed and treated elsewhere, they’re not happy, and they’re willing to travel. Our average patient travels 250 to 300 miles to come to us for care. These are people that really are in the game and are going to do what they need to do to find a cure.

They tend to be a more advanced stage population than  others. The article suggested that we culled out from inquiring patients those who were more advanced with their disease and that’s absolutely unsupportable.  We see many patients who had been told by MD Anderson, Sloan-Kettering, Cleveland Clinic that there’s nothing more than can be done for them at those institutions and to go home and get their affairs in order. We take those people in. We can introduce them  to patients who have heard that same thing from those institutions and others three years ago, five years ago, ten years ago.

We’re here for that kind of patient and do everything we can to bring them in. Every patient has to navigate their insurance structure, and that’s what culls out patients, not CTCA.  When the patients want to come to us, we’ll work very hard with their insurance company and with their employer to try to make sure everybody understands the situation. We look at what other options might be available for the patient and try to open doors that might otherwise be closed.

We see some insurance companies and some employers being much more flexible with these patients who clearly have no options elsewhere.  If a patient’s in an HMO and they’re not willing to let them opt out of the HMO into some sort of a PPO coverage, there’s really not going to be a way for them to come to CTCA. That’s the insurance market operating, not us culling patients.

David Williams: As you look at the next three or five years,  do you see any expansion opportunities? Is it putting facilities in different geographies from where you’ve been? Is it offering new kind of services? Where do you see the company heading over the medium term?

Steve Bonner: The future of health care is a really an exciting future to behold, and especially in oncology. For CTCA, we are looking at trying to make ourselves more conveniently accessible to patients. In the last seven years, we’ve gone from one center to five centers and we’re looking at a sixth center. We’re looking at the possibility of some less intensive centers that  we can put many more of them around the country and offer cancer information, central diagnostics and routine treatment. The therapeutic future may be even more exciting than that to us.  We think that the next major breakthrough in oncology is clear and that’s going to be understanding the disease at a genomic level and then being able to match known therapies much more precisely with the genomic abnormalities that a person’s expressing.

We’re working very hard on genomic innovation. Today, when you get cancer, a tumor shows up in one part of your body, insurance company providers go to an FDA-approved drop-down menu that says “if you have that cancer in that body location, this is the treatment that’s performed best in large population, placebo-controlled double-blinded studies”, and so you should get that. Every insurance company will pay for it and if you stay in network they’ll get it for you at a 40 percent discount.

The reality is that those large population studies produce the best tumor response in maybe 40 percent of the population. We’re prepared to pay for 100 percent of the population to get the therapy even though we know statistically only 40 percent are going to respond well.  As we dig underneath that, we find that your pancreatic cancer and my liver cancer may actually be driven by the same genomic abnormality, but our systems express tumors different., You’re going to get one therapy and I’m going to get another therapy. If we understood it genomically, we’d both get the same therapy and avoid a lot of unnecessary therapy that we deliver through the system today.  This is one way to take significant cost out of oncology care and really accelerate and enhance the quality and effectiveness of care. That’s the most exciting thing we see in the future.

David Williams: I’ve been speaking today with Steve Bonner. He is CEO of Cancer Treatment Centers of America. Steve, thanks so much for your time.

Steve Bonner: Thank you, David. Take care.

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