Health Business Blog

The New Health Dialogue hosts the Muppets Edition of the Health Wonk Review.

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Consumer Reports notes that patients are avoiding filling prescriptions and seeing the doctor due to financial pressures. From Bloomberg (More Americans Skipping Medical Care to Save):

Almost half of the 1,226 consumers taking at least one medication said they didn’t fill prescriptions, took less medicine than a prescribed dose or failed to undergo a medical test advised by their physician, according to the survey. That’s 9 percentage points higher than the 39 percent reported in 2010 by the annual survey.

Even with the U.S. recession ending more than two years ago, one in six American households and one in four with incomes less than $50,000 told Yonkers, New York-based Consumer Reports that they felt stress over how much they must spend on medical care. The pressure is prompting consumers to pursue potentially dangerous strategies for coping, said John Santa, director of Consumer Reports’ Health Ratings Center.

“The rising percentage of people putting off health care makes us wonder if we are really done with the recession,” Santa, a physician, said in a telephone interview. “This is one of the most sensitive barometers of how people are coping with the financial pressures.”

In the past efforts to control health care costs have faltered partly due to consumers’ perceptions that more care is better. That’s changing now, thanks to higher consumer exposure to medical costs –even among those who are insured– and more exposure to information about some of the perils of overtreatment.

It’s unfortunate that so many are straining to afford care, and I hope the recession lifts and all boats rise. Still, I’m hopeful that when/if health care gets easier for consumers to afford they will become more discerning about the kinds of care they seek out. I hope tools that provide transparency –not just of price but of efficacy– will become more widely available. It’s good to see Consumer Reports getting into the fray, as they are a trusted, credible source.

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I’m a big fan of cost containment in health care. But I’m dead set against using a $50 shot of Avastin in place of a $2000 shot of Lucentis even if safety and efficacy are the same. Why? Because it has a chilling effect on innovation.

To make a long story short, Avastin is a highly-effective anti-cancer drug. Lucentis is basically the same drug, but it’s indicated for an ophthalmic condition: wet age-related macular degeneration. Since Lucentis is injected in the eye only a little bit is needed. Some enterprising doctors and pharmacists figured out they could split up one Avastin dose into lots of Lucentis doses. Instead of $2000 or so for a Lucentis treatment they have an Avastin equivalent for about $50.

In the short run only Genentech –maker of both Avastin and Lucentis– loses out. Patients get a much less expensive drug and insurance premiums are a little lower than they would be otherwise. But it’s also shown the world that the price point for a wet AMD treatment is $50 or so. As a result, drugmakers are reluctant to develop products in this therapeutic area because they are afraid they can’t make money.

The problem is really the way that drugs are priced. Avastin is priced by volume, but really what patients are getting is a treatment for cancer that’s worth a certain amount of money, regardless of the amount of physical product used.

Now safety concerns are emerging over the use of Avastin in the eye. These could easily be the result of problems with the compounding pharmacies. Nonetheless, the Veterans Administration for one has decided to stop substituting Avastin for Lucentis. As soon as that was announced, the stock price for Regeneron –maker of a Eylea, a new drug for wet AMD– jumped 9 percent, which supports my point about the impact on innovation. You can bet the VA action also increased the likelihood that companies with wet AMD drugs at earlier stages of development will take them forward. I hope some of those drugs make it to market, offering new and better options for patients at a price somewhere above Avastin but below Lucentis.

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The  Kaiser Health News (KHN) service is taking the place of newspapers, most of which no longer have the resources for in-depth reporting. This week KHN is running a three-part series entitled Building Ambitions: The Big Money World Of Kids Care.

Today: Growing Size And Wealth Of Children’s Hospitals Fueling Questions About Spending

Tomorrow: One City, Three Hospitals (url not yet available)

Wednesday: Facing a Leaner Future (url not yet available)

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

David Williams: This is David Williams, co-founder of MedPharma Partners and author of the Health Business blog.  I’m speaking today with Steve Bonner.  He is CEO of Cancer Treatment Centers of America (CTCA).  Steve, thanks for being with me today.

Steve Bonner:            You’re welcome David.  I’m glad to be here.

Williams:            What is CTCA, and what is the Patient Empowered Care Model?

Bonner:            Cancer Treatment Centers of America is a rapidly growing network of very sophisticated cancer-focused centers that are licensed as hospitals. We are located in four states and under construction in a fifth.  We focus exclusively on cancer and specialize in later stage and complex forms. We have very sophisticated technology and talent and a lot of experience with cancer.

The Patient Empowerment Model of Care is the genetic foundation of CTCA.  We were created by an international merchant banker whose mother got cancer. When she died he concluded that he couldn’t find a place that really was interested in understanding what she needed and wanted.

He ran into a lot of bureaucracy.  So from the very beginning we have worked very hard to understand the patient and recognize the importance of giving patients as much control as possible over the process.

Williams:            I know a key process issue is related to the initial diagnostic work. Can you describe the issues that patients typically face when they’re in the diagnostic phase?

Bonner:            There’s a real irony at the very beginning of the cancer experience for most patients in America.  There are four things that they want once they know they’ve got cancer.  Number one, they want to know as much as they can possibly know about their cancer; where it is and how far it’s progressed in their body.  Number two, they want to know what options are available to them to treat the cancer.  Number three, they want to know what it’s going to cost them.  And number four, they want to know how quickly they can get into care.

The way the market works today is that the patient typically gets that initial diagnosis from a family physician who is not a cancer expert. They then get a referral to an oncologist and have to call and make an appointment and wait some period of time to get in. Tests are taken, and they have to wait for the tests to come back. Most often they’ll get another referral to get more precise tests so they have another wait time/turnaround time. So it’s generally weeks and it can be months before patients get into effective care. That builds stress in their minds over that timeframe.  It also obviously gives the cancer a change to progress even further without having an effective treatment.

Williams:            What is your company doing to address some of those issues?

Bonner:            Our latest innovation is called CareEdge. It is a combination of services and prices that addresses this diagnostic phase.  If someone is interested in CareEdge, they’ll get four specific components to the process.  Number one, we’ll give them a complete listing of the diagnostic services that they’ll get. We believe they’re very comprehensive and very complete.  Number two, they get our guarantee that we will complete the diagnostic process in no more than five days.  Number three, they get a guaranteed price for the diagnostic work.  And number four, they get a complete personalized written care plan that suggests what they should consider implementing in terms of moving to care.  They can either have us implement that care plan at CTCA or they can take it to another provider and move right into the care phase built on that plan.

Williams:            When you say that you have a comprehensive set of services, what would be the things that would comprise that suite?

Bonner:            It’s grounded in this very holistic and integrative style of care that we have.  They would go through all of the conventional consultations.  They would start with a consultation with an oncologist.  They would be examined with all of the conventional radiology exams including MRIs and other precise diagnostic techniques.  They would also spend individual consultation time with a radiation oncologist if that’s appropriate, a medical oncologist to look at chemotherapy, with a surgical oncologist if surgery seems to be indicated.

They spend one-on-one time with an oncology trained nutritionist because nutrition is so important to the cancer treatment process.  They would see a naturopathic doctor who is certified in oncology, with a mind, body, medicine trained expert.  They would have time with spiritual support people who work only in an oncology setting.  They also will have time with exercise physiologists to talk about how important exercise is to the immune system and to the treatment process.  They may talk to an acupuncturist and they may also get some exposure to things like humor therapy, laughter therapy, Reiki, yoga –all these things that can also be helpful to the process.

It’s a very comprehensive experience that’s conducted over the three to five day period that I’ve described.

Williams:            As you were describing those four different components, one of the ones that is not exactly service oriented is about the guaranteed price.  Can you talk about how that fits into an environment where presumably the vast majority of your clients are insured?

Bonner:            This is, as you’ve indicated, a brand new approach.  We’ve secret shopped both ourselves and also all of our competitors to see if there’s anything like this.  We can’t find anything like this. The insurance companies are very intrigued by it, but they’re not quite sure what to do with it or how to do it. So we’re in that process.

We had one patient come through the process who was actually a member of an HMO. We typically would not be accessible by HMO members, who would be restricted to the HMO network that they’re a part of. But she was at an advanced stage of cancer, she was a very knowledgeable and willful person and she wanted to come to CTCA.  She talked with her employer and with the HMO and they actually agreed to allow her to come for the fixed price. She paid part of the cost and the HMO paid the other part of the cost.

We had two other patients who were approved. We have one-off arrangements with insurance companies to accommodate this and to test the idea and the value of a fixed price offering for evaluation.

Williams:            It sounds like you have the option for people to go back to where they came from to implement their care plan.  Is that practical? Or when someone gets back from your controlled, service oriented environment are they just back to square one? Will the doctors just want to do their own tests and make their own treatment plan or is it actually a realistic option to more seamlessly integrate back in?

Bonner:            We think it’s realistic and we do provide all of the records and all the diagnostics.  All that is patient owned data in our opinion, so they can legitimately go back to somebody. You can’t quite plug and play, but it’s pretty close to that.  They’re certainly going to run into some attitudinal complications.  People may, as you say, want to tighten up or go deeper or rerun some things, but we believe that it’s fully actionable.

We also offer to collaborate with caregivers at home for all of our patients –not just in CareEdge.  So we can be talking to physicians who helped the patient before they came for the diagnostics or we can talk to them afterwards.  We encourage the patients to authorize us to get all the records that exist from prior to the time they came to us.  So from our point of view it can be very open, very collaborative and very actionable. But it comes down to all the vagaries of individual reactions back in the communities at home.

Williams:            You mentioned you’re in four specific geographic locations and that you’re opening in a fifth.  Can you tell me what the fifth is and also about how you think about what geographic locations to serve and what we might see coming down the road after the fifth one?

Bonner:            We’re in Illinois, Arizona, Oklahoma and Pennsylvania now.  We began construction on the next one in Georgia a month ago and we’ll be open there next summer.

We also have a clinical practice up in Seattle, Washington.  Our plans are to go to a sixth hospital.  We’re looking at locations in the Pacific Northwest.  We’re also thinking about something else in the Northeast because of the concentration of the population.  But our current plan is to build out six of these and to have a pretty broad presence geographically around the country.

Then we’re thinking about the next phase of distribution of our services, which might be less comprehensive centers surrounding these regional hospitals. We’d be in many more towns around the country to bring the less sophisticated treatment closer to home and then create a very easy way for people to move from those local CTCA facilities into the regional centers.

Williams:            I’m going to take you away from talking about company specific things and ask you more about policy.

There’s clearly starting to be a lot of discussion about costs and cancer treatment.  This is from a public that really doesn’t want to talk about any kind of limits, and that shouts “rationing” as there’s talk about cost control.

On the other hand it’s becoming clear that Medicare is bankrupting the country and a number of pharmaceutical companies have realized that there is a lot of money to be made in the cancer treatment business. So there are a lot of expensive treatments on the market and more in development. Some of these treatments have marginal efficacy, at least on average.

So I’m curious about how you see the cost debate evolving and what kind of a role CTCA might play in its niche.

Bonner:            The larger context from our point of view is that the health care industry in the United States is on a quest to become much higher quality at a more reasonable cost than it’s been in the past and also to allow itself to become much more accessible.

Our view is that if all you do is squeeze costs then you’re never really going to get there.  What we’re trying to drive is a conversation about the combination of quality, cost and value.  We want to help transform this market from one that is cost focused where people are constrained in their choices and pushed into closed networks in which there isn’t enough competition on quality or on price.

There is a disconnect between what people really value and what they’re willing to pay for and the services they’re entitled to get in an environment as personal as health care.  That pushes people to allow the government or insurance companies to make some of the most personal decisions in their lives and it destines all of us to a much less efficient market.

We’re working and trying to put much better information out there about the quality of what we do.  With CareEdge we start with this list of exactly what we’re going to do, the services we’re going to provide, the time we’re going to commit to in terms of delivering it and also the price.

If you go on our website you’ll see our publication of our length of life and quality of life outcomes. We’re trying to help people find the best combination of quality, price and value.  There are many obvious and some pretty subtle opportunities to take cost out of the process, but it’s not coming just from saying whatever you’re doing today you have to do it at a 30 percent lower cost.

Williams:            How are costs affecting treatment decisions today?  You talked about HMOs where people are in closed networks, which might affect where they’re going to go.  Are people making their own decisions, even those that have good insurance, that are based on costs when they have life-threatening illnesses like cancer?  What do you see coming from what Medicare is doing today?  Is cost being taken into account?

Bonner:            We see almost an explosion of consumer involvement and engagement in health care in our little space in oncology here.  We’re now hosting over 8 million unique visitors a year on our website and these are all people who are looking for information on cancer, looking for options on cancer. Many of them come into our process and learn more. That’s how many of them come to us for care, bringing a whole plethora of different insurance situations behind them.  We have some in-network relationships, some out-of-network and some HMOs. We wind up in these one-on-one conversations about how a combination of care and price is going to be handled.

There is certainly a price sensitivity here, but as I think you’re suggesting, when you get to life and death issues, price tends not to drive the decision.  It becomes a part of the decision and we see people studying that, but all of our patients decide to come to us on their own.  We don’t get referrals from anyone, so in the sense of taking control and in the sense of consumer shopping for different alternatives, that is the life that every one of our patients lives.  More of them are finding a way to come to CTCA.  The challenge is for the insurance company or the government to figure out a way to allow that to happen.

Williams:            Let me change topics on you once again and ask you a final question. You’ve been named recently as one of the hundred most influential people in health care along with some big names people might recognize such as Barack Obama.  What did it take to get on the list?  Why do you think you’re there?

Bonner:            That’s a great question and I’m trying to find that out.  One of our outward focused and in touch management fellows sent me an e-mail telling me that I was on the list, but I’m trying to figure that out.

I will tell you that we’ve been working to be active participants in the national dialogue on heath care and we’re more active in Washington than we’ve been.

Obviously we’re trying to refine our approach to health care and to tell the story that we think that our model belongs in the dialogue, so we’re trying to make that much more visible.

I’ve been working with a lot of different organizations to do that.  I’m on the board of the National Foundation of Legislators.  We’re participating in the Leapfrog Group and we’re founding members for the Center for Health Transformation.

We’re just trying to make this story available and my best guess is that somehow that found its way into the process of Modern Healthcare and here we are.

Williams:            I’ve been speaking today with Steve Bonner.  He’s CEO of Cancer Treatment Centers of America.  Steve, thank you very much for your time.

Bonner:            You’re very welcome David.  I really enjoyed the conversation.

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NaviNet recently launched a Mobile Connect offering for pharmacy benefit managers (PBMs), which provides real-time exchange of patient-specific drug information between PBMs, physicians, health plans and pharmacies. The information exchange includes e-prescriptions, clinical care alerts and prior authorizations for drugs.

In this podcast interview, NaviNet Chief Medical Officer Dr. Michael Ross and VP of Business Development and Partner Management Scott Rybak discuss the new offering in more detail.

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NaviNet discusses Mobile Connect for PBMs [ 22:23 ] Play Now | Play in Popup | Download

In addition to my consulting work and writing the Health Business Blog, I’m chairman of the board of Advanced Practice Strategies (APS), a medical risk management firm that provides litigation support for malpractice defense and an eLearning curriculum focused on enhancing patient safety.

To learn more contact: Timothy Croke, Director of Demonstrative Evidence Group. tcroke@aps-web.com or 617-357-0553 ext. 6664.

Here’s the Advanced Practice Strategies case of the month.

Judgment for the Defense
Shoulder Dystocia / Erb’s Palsy Injury

The plaintiff was admitted following spontaneous rupture of membranes for induction of labor.  She received an epidural in the active phase of labor and approximately 90 minutes later was initially thought to have reached the start of the second stage of labor. She began pushing at 5:47 p.m. but at 6:05 p.m. was told to stop because her cervix was not completely dilated— a small anterior lip of the cervix was found still present. Around one hour later, the patient’s cervix became fully dilated, so the patient resumed pushing with contractions.  Two hours later, the defendant physician was summoned to the room for the delivery.  Within 15 minutes of the physician’s arrival, the patient delivered the fetal head, and a shoulder dystocia was encountered.  The patient pushed herself into a sitting position at the top of her bed and closed her legs together.  In response, the defendant physician first asked that the patient be pulled down into the usual delivery position on the bed and then attempted the McRoberts maneuver to help effect delivery.  After this proved unsuccessful, the defendant physician performed an episiotomy, asked for application of suprapubic pressure, and subsequently moved to deliver the posterior shoulder.  Following release of the posterior shoulder, the remainder of the delivery quickly followed.  The child was later diagnosed with a brachial plexus injury (Erb’s palsy).

PLAINTIFF’S CLAIM:

The plaintiff maintained that the shoulder dystocia, and ultimately the Erb’s palsy, could have been avoided if the defendant physician had noted the length of time the plaintiff pushed and had intervened appropriately.  The plaintiff also believed that the defendant should have recognized, given the extended second stage, that the fetus was likely large and that a cesarean rather than a vaginal delivery was necessary.

___________________________________________________________________

VISUAL STRATEGY:

Collaborating with the defense experts and attorney, APS created a visual strategy that helped to describe the delivery and to show how the defendant followed proper standards of care, performing appropriate maneuvers to resolve the shoulder dystocia once diagnosed.

The first diagram illustrated an anterior cervical lip and how it compares to a fully dilated cervix.

The next diagram demonstrated the typical series of events leading to a shoulder dystocia, with the anterior shoulder lodged behind the maternal pubic bone.

A third diagram illustrated how the McRoberts maneuver and suprapubic pressure are applied in cases of shoulder dystocia to free the fetus’s anterior shoulder from behind the pubic bone, thus effecting delivery.

A fourth diagram showed delivery of the posterior shoulder.

Several additional visual aids indicated how brachial plexus injury occurs and the nerves affected by Erb’s palsy.

Charts pointing out the increased risks associated with a cesarean delivery as compared to a vaginal delivery helped show the jury why the defendant physician had felt it was safer for the patient and fetus to continue with a vaginal birth.
Chart 1: List of Risks of Cesarean Section
Chart 2: Risks of Cesarean Section per 1000 Women
Chart 3: Risks of C-section Compared to Vaginal Delivery

Another chart showed the number of needless cesarean deliveries required to avoid risk of one instance of a permanent brachial plexus injury  in a fetus weighing less than 4500gms.

Finally, a timeline set out the patient’s labor course, including the timing and duration of pushing.

This series of illustrations helped the defense successfully convey to the jury the following key points:

• During the plaintiff’s labor, nothing indicated any increased risk of shoulder dystocia.  Both the patient’s cervical dilation and the fetal descent occurred normally.
• Once the shoulder dystocia was diagnosed, the defendant physician immediately followed appropriate steps to resolve the emergent situation and deliver the infant, with the unfortunate outcome of an Erb’s palsy.

RESULT:

The jury found in favor of the defense. 

“This case involved an infant who suffered a fairly significant shoulder injury at birth.  At trial, the child was 8 years old and presented with fairly significant disability.  There was a large sympathy factor at play during trial as a result. The illustrations that APS developed were instrumental in allowing the defendant physician to explain her medical decision-making in great detail.  They allowed her to stand in front of a jury and ‛teach’ them in a friendly and caring way about each and every decision that she made.  In this way, the focus of the trial was diverted away from sympathy and toward the clinical decision-making in the case.  The visuals were instrumental in obtaining a defense verdict.” 

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An initial diagnosis of cancer is enough bad news for anyone, but unfortunately it often also comes along with being thrown into an oncology diagnosis and treatment environment that is a lot less patient centered than one might expect. Cancer Treatment Centers of America (CTCA) has recognized the challenges cancer patients face and is positioning itself as a destination for empowered patients.

I spoke today with Stephen B. Bonner, CEO of CTCA, about a new diagnostic and treatment planning offering called CareEdge, which is designed to address the four things CTCA has determined patients want to know after finding out they have cancer:

1. As much information as possible about their particular cancer, e.g., where it is, how far it’s progressed
2. What treatment options are available
3. How much it will cost them
4. How quickly they can get into care

The diagnostic bundle reminds me of a transparent, patient-friendly approach I saw in Singapore when I was researching medical tourism a few years ago. It’s about time we saw it in the US market.

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David Williams interviews CTCA CEO Stephen Bonner [ 18:02 ] Play Now | Play in Popup | Download

Happiness in this World has an interesting post from last November (which I happened to see re-posted at KevinMD), which tells the story of a misdiagnosis of one physician by another. The problem: “early closure,” or jumping to conclusions. From the blog:

Early closure, it turns out, is a danger that lies in wait mostly for seasoned clinicians (far more commonly, at least, than for medical students and residents).  Because seasoned clinicians rely more on pattern recognition to make diagnoses and often come to their conclusions rapidly, they’re at far greater risk for leaping toward those conclusions without examining all other relevant possibilities.  Patients often present with a constellation of symptoms that don’t entirely fit the diagnosis they actually have.  Often the discrepancies between these presentations and the textbook descriptions are unimportant—but sometimes those discrepancies exist not because the patient’s body hasn’t read the textbook, but because the diagnosis the doctor makes is the wrong one.  Such misdiagnoses are occasionally unavoidable:  the symptoms with which the patient presents are simply too far afield from the way the medical literature says the disease should present (luckily for us all, this is the exception and not the rule).  At other times, however, these mistakes are made because the physician was simply in a hurry, or tired, or didn’t care enough to think through the evidence in ways he should have, saw a pattern he thought he recognized, and stopped asking the most important question a physician can ever ask:  what else could this be?

I’ve been aware of this tendency in medicine for some time, but this is the first time I’ve thought about how the same problem manifests in other fields and how it’s the more seasoned professionals who fall prey.

It reminds me of my own profession, management consulting. Junior consultants tend to beaver along gathering data and performing analyses, not becoming comfortable with findings and conclusions till everything is in. It’s often joked that their more experienced managers are satisfied with two data points –after all, that’s enough to make a line. And the partners just need one data point –they can assume the slope.

This tendency actually had an impact on my career path at my former firm. One senior partner observed that I walked past him without saying hello once when I was a summer intern. This was apparently brought up during a promotion discussion five years later. Who knows if it was even me? Another senior partner concluded based on an early encounter that I was the quiet, academic type and would be a “farmer” rather than a “hunter.” She may have been surprised when I left to start my own firm!

What I took away from those experiences was the importance of making a good first impression. But now as a “senior partner” myself I also realize the importance of keeping an open mind and not jumping to conclusions. It helps to take a data intensive approach and to work with team members who are not afraid to challenge one another. It’s a good approach when diagnosing business or medical problems, and also a good way to work with people.

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As you may have heard Steward Health Care and Tufts Health Plan are working together to offer an insurance product for small businesses in Massachusetts that will be priced up to 30 percent lower than competitors. The opportunity is clear: most businesses are required to provide coverage under Massachusetts health reform laws and benefit plans are required to be generous. Meanwhile Bay State residents are accustomed to using expensive academic medical centers for everything including primary care; that among other factors keeps costs high. While it’s normal in most of the country to see health plans with limited networks, that has not been the case in Massachusetts where employers have lacked the courage to try it for fear of losing a competitive edge in the talent wars.

Of all the health plans in Massachusetts, Tufts has been battered the most by the market power of the big provider organizations, especially Partners HealthCare. It is therefore keen to try teaming up with private equity backed Steward, which is trying hard to offer value for money.

There’s a reasonable chance that the strategy will work. The target customers have done about all they can to control costs and shift financial responsibility to their members, but premiums are still rising 15% per year or so. Smaller companies don’t have the option to self insure, and they can’t easily drop coverage. The new plan advertises that Partners hospitals (Massachusetts General Hospital and Brigham and Women’s Hospital) will be available for “services that cannot be delivered by the Steward network” so that should make it easier for employers to swallow.

The advertised price advantage is enticing, but that still doesn’t make the premiums low. Even if the savings really are as high as 30 percent, it just turns the pricing clock back two years for the typical customer.

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