Health Business Blog

Health care business consultant and policy expert David E. Williams share his views

Maybe we should tax the fax

The Fax Machine: Technology That Refuses to Die, in today’s New York Times, reports that “the fax persists as a mockery of the much-predicted paperless society.” Sales of fax machines are rising.

The main businesses I encounter that still rely on faxing are doctors’ offices and pharmacies, and sure enough there was a mention of this in the article. The author and a CVS spokesman put this use in a positive light, touting the benefits of faxed prescriptions compared with telephoned or hand-carried prescriptions. Faxes provide a written record and reduce security issues associated with email, they say.

Think about these claims in relation to the financial services or airline industries and you will realize how far behind the times medicine is. Remember when you had to write out withdrawal slips by hand and wait in line for a bank teller? ATMs have been in place since the 1970s –with security and documentation controls that are more stringent than for pharmaceutical dispensing. Remember when your travel agent used to write out airline tickets using red carbon paper? Those days are long gone.

Even physicians who use “electronic” prescribing often print out the prescription and fax it in or hand it to the patient, eliminating most of the benefit. Change is under way, led by governmental and private payer e-prescribing programs, and enabling initiatives such as Rx Hub, but it’s slow going.

In the meantime, maybe we should consider a tax on faxed prescriptions to discourage their use and to speed adoption of 20th (or even 21st) century technologies.

NEHI wants to spur continuous blood glucose monitoring

In the last two decades, self-blood glucose monitors (SBGM) have enabled diabetics to check their own blood sugar levels to keep their disease under control and reduce complications, such as blindness. The more frequent the testing, the better the control, but all the devices on the market require a finger stick to get a blood sample. And that hurts, even if the new devices hurt less than the old ones. As a result, most diabetics don’t test as frequently as they should.

The SBGM business follows a classic “razor and blade” business model, which has been lucrative for market leaders J&J (LifeScan) and Roche Diagnostics (Accu-Chek). The meters are essentially given away, but the test strips are expensive. J&J has been the most successful by focusing on “heavy users” who do a lot of testing –using a lot of strips– once they have a meter. Generic meters and strips have made only small inroads into the market.

According to today’s Boston Globe, The New England Healthcare Institute (NEHI) will release a study today in an attempt to spur rapid approval and adoption of continuous blood glucose monitors, which could provide information on glucose levels all the time rather than only when a blood sample is taken. This would allow better control than current testing methods and be easier to tolerate. The NEHI study focuses on establishing accuracy standards to speed the FDA approval process.

When continuous monitoring becomes common, it could undermine the “razor and blade” business model by ending the need to use a new test strip for every test. On the other hand, manufacturers like that model so much that they may attempt to replicate it by selling high-margin disposable items –such as sensors and filters– along with the devices.

It will be interesting to watch how the current players prepare and respond to the competitive threat.

Pharmacogenomics and personalized medicine –still a long way off

The major news outlets gave prominent coverage to Tuesday’s release of a guidance document on pharmacogenomic data submissions for clinical trials. The New York Times said,

The Food and Drug Administration took a significant step yesterday toward the development of so-called personalized medicine, in which drugs would be tailored to individuals based on their genetic profiles.

The truth is, we are still far away from this vision. Consider the following:

  • During the hype surrounding the Human Genome Project in the late 1990s, Celera Genomics, Human Genome Sciences and others talked about pharmacogenomics as though it were already here. The new guidance document points out that, “the field of pharmacogenomics is still in early developmental stages, and [its] promise has not been realized.”
  • We’ve seen in our consulting assignments that innovation in clinical trials is very slow. Sponsors are reluctant to try anything new because they fear it will slow down the approval process with ethics committees and delay FDA approval. As a result, outdated endpoints with dubious significance are used routinely, just because they’ve been used in the past. One example is the Hamilton Anxiety Scale, a 40 year old measure that is a weak indicator, at best, of whether a drug works.

It’s good to see the FDA move forward with this guidance. However, well organized and assertive patient groups and clinical leaders are at least as important in spurring innovation in clinical trials. This is most apparent in HIV/AIDS, where the old ways of doing things have been discarded.

Hospital fall alert

An interesting juxtaposition of stories in the Wall Street Journal today:

Hospitals Aim to Curb Injuries from Falling; Risk for Young Patients, describes the surprisingly large number of injuries and deaths from patients falling in the hospital. Apparently there are more than 1 million falls per year. Contributing factors include patients who are disoriented after surgery or by medications, understaffing, lack of fall prevention procedures, and poor equipment.

But one equipment based solution seems to have its own problems:

Hospital Beds Seized Following 7 Deaths describes the seizure by Federal Marshals of Vail Products beds, “which have a tent like structure as part of the bed designed to keep patients… from falling out.”

At least 30 people have become entrapped in the beds, and some died as a result.

Medicare hires ombudsman to be “voice” of the beneficiary

CMS has hired an ombudsman as mandated by the Medicare Modernization Act of 2003. The ombudsman has a number of responsibilities:

  • Assist with complaints and inquiries from beneficiaries
  • Assist in collecting information for filing appeals
  • Help with enrollment and disenrollment problems
  • Assist with premium issues
  • Work to ensure beneficiaries understand and can exercise their rights

The ombudsman, Dan Schreiner, is currently a health care policy analyst. He has worked in the Dept. of Health and Human Services before and at T. Rowe Price, where he focused on participant services.

It will be interesting to see how Mr. Schreiner defines the role and what he can achieve.