Health Business Blog

The pharmaceutical benefit management (PBM) industry has apparently decided it’s time to buff its image. A new That’s What PBMs Do campaign has been launched by the Pharmaceutical Care Management Association (PCMA), which counts the big 3 PBMs and a few smaller ones among its members. Some articles speculate that the campaign is in response to scrutiny over the pending acquisition of Medco by Express Scripts. Although it seems a little bit unlikely that CVS Caremark would go along with that line of thinking, the pro-mail order and implicitly anti-drug store message of the materials does bear the handprints of Express Scripts/Medco.

The print ads and video make the following claims:

• PBMs reduce pharmacy costs for employers, unions, and consumers
• PBMs play a key role in the Medicare Part D success story
• PBM mail-service pharmacy improves safety, savings and convenience

Of the six print ads, four focus on how PBMs restrain costs: two are Medicare Part D related and there are one each for employers and employees. Two others focus on mail order: one emphasizing its safety (reduction in medication errors) and another its convenience. The text is quite spare –probably the less said the better, and the ads are dominated by photos of one or two people each. In keeping with PBMs’ end users, the people in the ads are generally on the older side.

The almost three minute long video covers many of the same topics in a little more detail. After a gentle introduction there’s a confusing and meaningless graphic at the 30 second mark showing that “the number of prescription drugs has skyrocketed in recent years.” There’s a bar graph with 1985, 1995, 2001 and 2011 on it. The y-axis is labeled “amount.” I assume this is the total number of SKUs out there including generic medications, but it is curious why it’s thrown in there. Maybe they didn’t want to demonstrate how drug utilization has risen and decided to put out a feel-good innovation message instead.

The video describes how PBMs negotiate discounts with drug manufacturers and retail pharmacies, employees thousands of pharmacists to counsel patients by phone in the privacy of their own homes 24 hours per day, provides home delivery, and uses e-prescribing technology to avoid drug errors. It boasts of PBMs’ role in keeping Medicare Part D costs under control and notes that the states generally don’t use PBMs for Medicaid, even as costs are “spinning out of control.”

On the whole the campaign is accurate. And it probably is a good thing that consumers and policymakers develop an understanding of PBMs. But there are certain omissions and misleading statements. For example:

Share

As states grapple with growing Medicaid costs in an era of sluggish economic growth and antipathy to taxes, they are very pleased when they find a way to increase benefits to citizens while reducing their own expenditures. I predict many states will follow the example of Washington, which since 2003 has run a program to identify Medicaid enrollees who are eligible for benefits from the Department of Veterans Affairs.

Surprisingly (to me anyway) there are numerous veterans who end up on Medicaid instead of turning to the VA system, which offers richer benefits. For example, some veterans qualify for the VA’s Aid and Attendance Pension, which helps low-income veterans and widows receive long-term care in their home or an institution. Medicaid may attempt to recover costs by going after an enrollee’s estate, while the VA doesn’t. And the VA may also provide a pension for elderly and disabled veterans and their survivors, and a death benefit.

The state of Washington considers its efforts a “win-win” that offers enhanced benefits to veterans while achieving $30 million of cost avoidance for the state (which pays a share of Medicaid benefits but not VA benefits). As the number of people eligible for Medicaid expands under the Affordable Care Act, I’m sure Washington and other states will find ways to achieve even greater savings by diverting potential Medicaid enrollees into VA programs.

I’m completely in favor of this program and believe that veterans should receive all the benefits they have earned. However, as a society we should do more to recognize the full cost of our military policy. Cost accounting for the Iraq and Afghanistan wars should include the long-term VA and other costs of returning veterans, and the state of Washington should also at least acknowledge what the increased impact is on the federal budget. If every state followed Washington’s example, taxpayers would pay more money not less, as any reduction in state spending is more than made up for by increases on the federal side. I’d also like to see unclaimed benefits estimated and publicized.

Share

Writing in Today’s Hospitalist, Dr. Stella Fitzgibbons offers specific and useful advice to physicians who have to deal with the wishes of a family when a patient can longer speak for him or herself. I’m confident that her approach will yield constructive results in most situations, but I’m uncomfortable with the shortage of empathy and reflectiveness that the article ultimately conveys.

The scenario she introduces is as follows:

[W]hat about a patient who can no longer speak for himself—and family members who either seem unrealistic about the effectiveness of medical treatment or actually refuse to honor his wishes? What about a doctor’s duty to relieve suffering and not provide treatment the patient wouldn’t want ow that does him no good?

To summarize, here are the tactics Fitzgibbons recommends:

• Be sure all the doctors seeing the patient are saying the same thing –so that a doc who doesn’t like to give bad news doesn’t inadvertently give the family the idea that a cure is possible
• Get records from prior physicians –since families may transfer patients from hospital to hospital until they hear what they want
• Present facts and show them CTs. “Make it clear that the patient’s doctors know what is wrong and are not just speculating”
• Bring in a neurologist you trust so “the family can’t claim that he’s unqualified to talk about the prognosis”
• Find a chaplain who will be on your side
• Seek help from legal staff so you can ignore the family’s wishes and use the patient’s advance directive
• Persuade the patient that their “advisor” is less qualified than yours and that their stories of relatives who recovered are irrelevant
• If you think they are acting against the patient’s interests for their own gain, e.g., “they have been paying their own rent with his disability check” –then let the know you’re aware of it
• Stick to your principles since you know you’re doing the right thing for your patient

I don’t know the author and have no reason at all to distrust her motives. But I do get nervous about her level of certainty. In particular:

Share

Growing up in the suburbs in the 1970s and 80s I knew of teens experimenting with alcohol and marijuana. Cocaine, LSD, PCP and barbiturates were around, too, but pretty rare. I only knew of one teen who misused prescription drugs (in his case codeine). And if anyone in my area used heroin I would have been shocked.

Things have changed. In particular, strong opioids such as oxycontin are now widely prescribed. Teens may find some extras lying around in their parents’ medicine cabinets or even receive some themselves after an injury or medical procedure. Oxycontin has the veneer of respectability and the illusion of safety. After all it’s a commercially manufactured, legal product prescribed by a physician.

But it’s pretty easy to get addicted and that’s when the real troubles begin. Oxycontin is widely available on the street, but it costs about $1 per milligram in Boston, or $20 for a single 20 mg tablet. After breaking their piggybanks and using up their allowances, teens make a surprising discovery: heroin is much cheaper than oxycontin and produces the same effect. And that’s how good suburban kids become heroin addicts, even though they themselves and their parents would never have predicted it.

There’s a growing realization that this problem needs to be addressed. That’s a good thing for public health and also represents an opportunity for companies that can find a way to support these efforts.

New York State just released a report showing that narcotic prescriptions in the state increased 36 percent from 2007 to 2010. For Oxycontin the increase was a staggering 82 percent. Pharmacists are already required to report on sales of controlled substances every 45 days, but new rules would require them to scrutinize patients’ prescription records before filling and to report each filled prescription

Pharmacists would face significant fines for not checking prescriptions. Predictably the state pharmacist association is up in arms, calling such measures “ridiculous” and asserting that regulators don’t understand what the workflow is like behind the counter.

The New York proposal may not be optimal. Nonetheless public officials are justified in taking tough measures. The  proposed requirements do seem somewhat onerous. But that creates a business opportunity for those software and workflow companies that can develop effective and efficient data collection, analysis and reporting tools to aid pharmacists, physicians and public and private payers in addressing this problem without losing productivity.

Share

Last month I noticed that the store brand “pure” vanilla extract I had just purchased contained corn syrup, whereas the brand name version in my pantry didn’t. From the pharmaceutical industry I’m used to generic products being essentially identical to branded items, and I guess I just assumed the same was true with foods. Turns out that’s not the case, at least with vanilla.

I sent the following email to SuperValu, whose name was on the Shaw’s brand product, on December 18:

“In the past I have purchased McCormick Pure Vanilla Extract. This time I purchased Shaw’s Pure Vanilla Extract. When I compared the labels I was disappointed to see that while both products contain vanilla bean extractives in water and alcohol, the Shaw’s product also contains corn syrup.

How much corn syrup is in there and why?

It seems to me that it is misleading to refer to the product as pure and then include corn syrup. What do you think?”

I received a response within two hours. SuperValu didn’t know the answer but promised to check with the supplier to find out the answer within about five days. I was just starting to think they’d forgotten about me when I received the following email today:

“Dear Mr. Williams:

Thank you for taking the time to contact us. We welcome the opportunity to address your disappointing experience with our Shaw’s Pure Vanilla Extract.

Pure Vanilla has a standard of identity provided by the Federal Government. This means the formula must contain certain ingredients which are standard to that particular product.

The word pure indicates the vanilla flavor comes only from the extractives of the vanilla bean. The amber colored liquid known as pure vanilla must also contain, at least, 35% ethyl alcohol and is the extractives of 13.35 ounces of vanilla beans. Other optional  ingredients that may be added to pure vanilla are sugar or corn syrup which enhances the delicate vanilla flavor.

If you wish to respond to this note by e-mail, please include your name and e-mail address.

We hope to have the continued pleasure of serving you.

Sincerely,

[Name of  Person]
Consumer Affairs Specialist”

Interestingly, the email was from McCormick Consumer Affairs, which I assume means McCormick makes both the branded and store brand versions on sale at Shaw’s. That’s a different story from what I see on store brand OTC medicines, which often contain explicit labels indicating they are not made by the branded producer.

This Yahoo Answers page indicates that corn syrup is used to mask inferior beans, which sounds like a logical explanation. Even if the beans are the same quality it’s probably cheaper to include some corn syrup.

In any case, it’s back to the pricier brand name version for me next time. And I still think it’s misleading to call this product “pure” even if the government allows it.

Share

Should we just hand uninsured adult diabetics $1000 per year rather than enrolling them in Medicaid? That’s the question I’m left with after reading Medicaid Expansion Under Health Reform May Increase Service Use and Improve Access for Low-Income Adults With Diabetes in this month’s diabetes focused issue of Health Affairs.

If the Patient Protection and Affordable Care survives the Supreme Court and the Republican Party, millions of uninsured, non-elderly, low-income adults will be newly eligible for Medicaid in 2014. The authors of the article compared diabetics on Medicaid to those who lacked insurance and found:

• Much higher health care spending for those on Medicaid: $14,229 v. $3,498
• Much higher out-of-pocket expenses for the uninsured: $1,446 v. $415
• Better access to medical services by those on Medicaid
• Better access to prescription drugs by those on Medicaid

Compared to their uninsured counterparts, diabetics on Medicaid go to the doctor more, use more prescription drugs, get admitted to the hospital more and go to the emergency room more.

The authors would dearly love to say that outcomes for diabetics on Medicaid are better, but alas the evidence is lacking. A couple of process measures (HbA1c measurement and retinal exam) were significantly better for Medicaid patients but others –foot check, blood cholesterol measurement, flu vaccination– weren’t. (The authors cite poor sample size –but unfortunately the appendix, which is supposed to include more detail on these analyses is mysteriously absent from the Health Affairs website.)

There’s no attempt in the article to document real outcomes measures such as reduction in complications or even improved glycemic control.

I found this section of the discussion particularly discouraging:

“Taken together, the findings for spending, use, and access in our analysis indicate that Medicaid facilitates financial protection and access for enrollees with diabetes and complex health needs. The findings also indicate that currently uninsured adults with diabetes will probably experience increased utilization and improved access upon gaining Medicaid coverage.

Additional research is needed to understand Medicaid’s role in facilitating access to recommended diabetes care, because the literature on this topic has mixed conclusions.”

In other words, being in Medicaid definitely saves a diabetic enrollee money (how could it not?) and “probably” –but may not– improve access. (And there’s silence on outcomes.)

In the absence of more compelling evidence, there’s a pretty good argument to be made that the main impact of enrolling a diabetic in Medicaid provides doctors, hospitals, pharmaceutical companies et al. access to a paying customer to the tune of about $10,000 above what an uninsured diabetic yields. This is not the kind of access the authors want to talk about, but that’s what I read from the data.

From a purely financial standpoint maybe it would make more sense for the government to hand each uninsured diabetic $1000 per year (the difference in out-of-pocket costs between the Medicaid enrollee and the uninsured) and save the other $13,000 that’s captured by the health care system.

I’m not actually advocating such a policy, for three reasons:

Share

New York University medical students are moving beyond the traditional cadaver of anatomy class to dissect a virtual model made by BioDigital Systems, reports the New York Times. It’s pretty cool, but hardly surprising that advanced 3-D graphics and simulation technology are making their way into health care. Memory, processing speed and rendering techniques have gotten to the point where the building blocks are accessible and even commonplace in other parts of the economy, such as entertainment.

The creators have big ambitions:

BioDigital plans to develop the virtual cadaver further on its new medical education Web site, biodigitalhuman.com, with the aim of providing a searchable, customizable map of the human body… In the coming months, the company plans to offer its code to… health Web sites that want to embed images of the respiratory system, or to doctors who want to show animations of prostate cancer surgery to patients.

“We wanted to use our data visualization to improve knowledge of complex health topics,” [designer John] Qualter said. His firm hopes to position the virtual body as the health education equivalent of Google Maps — available as a free, easy-to-use public Web site and in an upgraded, fee-based professional version.

“We want to become a scalable model,” Mr. Qualter said, “a Google Earth for the human body.”

They or a competitor have a good shot at it and I’m sure they’ll be plenty of interest among the general public.

The Times concluded the article in a predictable way, with assertions that are likely to be proved wrong over the next 10 or 20 years:

“I don’t think this will ever replace cadavers,” said [first year student Susanna] Jeurling, 24. “There’s something about being able to hold [an organ] and turn it in your hand.”

Administrators at the medical school say they have no plans to phase out dissection, an educational method that dates back to the Ptolemaic era. The 3-D digital human body is merely a complementary teaching method, said Dr. Marc M. Triola, associate dean for educational informatics.

Are these folks really so short-sighted that they can’t envision a time in the not-so-distant future that an artificial cadaver will feel exactly like the real thing?

Share

Legal immigrants will enjoy the same rights to subsidized health insurance coverage as citizens of Massachusetts, thanks to a ruling by the Supreme Judicial Court. Although it will be painful for the state to fund the approximately $150 million hit to the budget, it’s the right thing to do and also a smart thing.

Massachusetts has achieved near-universal coverage thanks to its health reform law. Although health insurance costs are among the highest in the nation, Massachusetts can afford to have everyone in coverage. That’s because Massachusetts has a modern, knowledge based economy with high wages, thanks largely to the state’s investment in education and infrastructure, and its open minded populace.

Still, high and rising costs are a burden and universal coverage places a strain on the state’s finances. In 2009 the state legislature shaved $130 million from the budget by going after an easy target: subsidies to legal immigrants.

This was a bad idea for three reasons. First, it undermined one of the tenets of health reform: getting everyone into coverage. It’s important to have everyone in the system so that providers don’t have to deal with uncompensated care and residents don’t miss out on services that could help them and make them more productive.

Second, the system’s costs should be addressed by improving value, performance and efficiency, not by kicking people out or weakening benefits. It’s best for us to face up to the cost challenge and do something about its root causes, rather than foisting pain on vulnerable segments of the population.

Third, it’s vitally important that the state continue to be attractive to immigrants, who are crucial to the dynamism of the economy and the culture. Take a look around the state and the country as a whole and you’ll find that immigrants are strong engines of economic growth. If I had to place a bet, I’d put my money on immigrants rather than the “top 1%” as the best job creators.

So I’m glad to see Massachusetts doing the right thing, and the Supreme Judicial Court playing a constructive role in the process.

Share

More academic medical centers are turning to national advertising, with many seeking to boost admissions of well-insured (or simply wealthy) patients from outside their local catchment areas. It’s hard to say whether such initiatives will generate an attractive return on investment for the institutions, but it does tell you something about the state of the market that these initiatives are being pushed now, when hospitals are worried about squeezes from Medicare and from private payers pursuing capitation.

NPR covers the topic under the misleading headline In Tight Times, Medical Schools Market Themselves, describing initiatives by Mayo Clinic, Mount Sinai, New York Presbyterian and Vanderbilt. Many of the advertisers are a bit cagey or even misleading about why they’re investing in advertising. The funniest quote is from Vanderbilt’s chief marketing officer who declares:

“We think of it almost as a service to the public, to get the word out.”

Almost, but not quite. As marketer John English puts it,

“There are ancillary benefits to an effective national or regional campaign. That said, during a time in health care where dollars are precious, I don’t believe those would be the key reasons for a national campaign. I think the key reason is to attract more patients.”

I really have nothing against academic medical centers promoting themselves. I’ll be really excited when they start to compete not just on reputation and high-tech wizardy but on outcomes and value as well.

Share

In Matching Supply to Demand: Addressing the U.S. Primary Care Workforce Shortage the National Institute for Health Care Reform observes that the primary care workforce expansion components of the Affordable Care Act will not be sufficient to meet demand. The funding and other incentives to encourage the training of new primary care physicians will take a long time to impact the system. The Institute makes two additional proposals:

• Allow advanced practice nurses to work independently (without physician supervision) as some states have done
• Adopt payment policies that increase primary care practitioner productivity by encouraging teamwork

Both of these proposals are ok as far as they go. In many cases nurse practitioners are doing a fine job providing primary care; in other cases patients would benefit from the added training and experience of physicians. A medical home or team based model is also a good idea, although it may not automatically lead to an expansion of primary care capacity. As the analysis indicates, some medical homes begin by reducing panel size.

There’s no single solution that will be adequate. Therefore let me propose a couple more ideas:

• Encourage increased immigration of primary care physicians. Foreign-born doctors are already a major component of the primary care workforce, but in recent years the US has become less welcoming of immigrants and foreign doctors have enjoyed better opportunities in their home countries. We might as well take advantage of a willing, well-trained labor pool –and the expansion can happen quickly
• The analysis is silent on the fact that female primary care physicians tend to work fewer hours than their male counterparts and retire earlier –often when they take time off to have children. There should be a greater focus on retaining female physicians in the workforce and encouraging them to work more hours. One area to address: re-entry into clinical practice after time away

Share