Health Business Blog

Surgery is expensive and it’s a difficult cost for health insurers to control. So insurers are using a new tactic –graphic, gory still images and videos of surgery– to discourage patients from proceeding, according to the Wall Street Journal. The article positions the videos as:

…part of the push toward so-called consumer-driven health care, a movement that encourages patients to be more discriminating shoppers, in part by requiring them to spend more of their own money.

I don’t think so. In a typical consumer directed plan, there’s a relatively high deductible and then traditional PPO insurance comes into force. Almost any surgical procedure will blow through a patient’s deductible and put them squarely into the traditional insurance arena, at which point the patient isn’t spending his own money.

It’s a good idea to educate patients about surgery; when patients know more about various options they may choose less aggressive paths. And there are services that can help patients make informed choices, without simply trying to scare them off. One such service is called EMMI, and is offered by Rightfield Solutions. Rightfield focuses on informing patients about their surgery through simple, interactive graphics and text without the gore. The company’s value proposition is a little different; it works to simultaneously improve patient satisfaction and to reduce malpractice risk by setting realistic expectations and documenting that those expectations were set.

Meanwhile, it won’t be long before the makers of the gory surgery videos start making videos of the side effects of expensive drugs. Stay tuned for videos of patients vomiting, having diarrhea, heart attacks, and episodes of psychosis.

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When Merck announced it was laying off 11% of its workforce, the stock went down. Analysts say it’s because the cost cutting didn’t go far enough and because there weren’t any great new ideas for growth. And they’re right.

The truth is that big pharma companies, and Merck in particular, haven’t done a good job of discovering and developing new drugs. Merck’s headcount reductions –even if not heavily concentrated in R&D in this round– are an indicator that the Emperor is starting to realize he has very few clothes. Merck’s R&D drought has been evident for years, and if anyone needed proof it was revealed when Merck touted the oh-so-innovative addition of vitamin D to Fosamax as a big highlight in its pipeline a year or so ago. Almost everything else in the late-stage pipeline is a vaccine, not traditionally the stuff of blockbusters.

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From the Wall Street Journal:

R. Glenn Hubbard, former chairman of President Bush’s Council of Economic Advisers, says the Bush-backed expansion of Medicare to include prescription drugs was “unwise.”

“The Medicare expansion without substantial reform of the system was unwise fiscal policy,” Mr. Hubbard, now dean of Columbia University’s business school, said in an online exchange sponsored by The Wall Street Journal.

“The current Social Security and Medicare systems are on an unsustainable path,” Mr. Hubbard said in the exchange with Robert Reich, a Brandeis University professor who served as secretary of labor in the Clinton administration. “In both cases, sound fiscal reform should involve slower benefit growth for high-income households. In addition, fiscal reform for Medicare must be accompanied by reform of health-care markets.”

Too bad Hubbard didn’t speak up when he was chairman of the U.S. Council of Economic Advisors from 2001 to 2003, during the time this policy was developed.

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Check out Grand Rounds, the best of this week’s medical blogging, at Over My Med Body!

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A study in the Archives of Internal Medicine indicates that elderly people with heart failure admitted to US hospitals have a lower 30 day mortality rate, but that the one year mortality rates are the same. This pattern has been seen for heart attacks as well.

The authors speculate that the explanation may be that initial care in the US is more intensive, but Canadians have better access to follow-up care and prescription drugs.

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Medgadget is accepting nominations for the best medical weblogs in the following categories.

• Best Medical Weblog
• Best New Medical Weblog (established in 2005)
• Best Literary Medical Weblog
• Best Clinical Sciences Weblog
• Best Health Policies/Ethics Weblog
• Best Medical Technologies/Informatics Weblog

Click here for the post. Add your nominations in the comments section.

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The New York Times reports that many drug reps are recruited from the ranks of college cheerleaders. According to a cheerleading coach, they have “[e]xaggerated motions, exaggerated smiles, exaggerated enthusiasm.. and they can get people to do what they want.” The “wholesomely sexy” look doesn’t hurt either.

Pharma likes the idea of cheerleaders as sales reps, but probably wouldn’t like the suggestion that they be moved to the sidelines and limited to a supporting role.

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Merck plans to cut 11% of its workforce and divest 5 plants in a bid to restructure. Considering the paucity of new drugs and the patent expirations and withdrawals of old ones, that makes a lot of sense. Manufacturing, in particular, doesn’t really belong in a big pharma company. It can be done much more efficiently and at the same quality on an outsourced basis. The only rationale to do it internally is for the tax benefits it generates. But when outsourcing is done right many of those benefits can be preserved.

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The physician shortage in the rest of the country is being eased somewhat at the expense of New Orleans. Headhunters who had been trying without success to fill positions had their lucky break when Katrina arrived. Suddenly hundreds of physicians were unemployed through no fault of their own. New Orleans will have a tough time getting them back, and that’s going to badly hurt rebuilding efforts. A story in the Washington Post (New Orleans Health Care Another Katrina Casualty) explores that aspect of New Orleans’s troubles.

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My grandmother, who used to pick her own cranberries from a bog near her house, used to tell me that cranberries were “good for the male organ.” She’d be happy to hear the results of a new study that suggest that cranberries help prevent tooth decay. Of course, cranberries are usually sweetened with sugar, which defeats the purpose.

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