Kidney dialysis is one of the most opaque and problematic sectors of the healthcare economy. It’s controlled by a duopoly that extracts big dollars from private payers while maintaining a symbiotic relationship with the Federal government. Patients aren’t particularly well served and costs are rising.
President Trump’s executive order aims to encourage the use of home dialysis. That’s a good thing, as CareCentrix CEO John Driscoll and I discuss in this edition of #CareTalk Shorts.
The article itself is more balanced. Of course it quotes the parents of a couple of kids who take expensive meds, objecting to anyone putting a price tag on their lives. But it also quotes health economics experts pointing out that the price can’t be infinity.
The Institute for Clinical and Economic Review (ICER) follows a data-based approach to assessing the value of drugs, utilizing Quality Adjusted Life Years (QALY) and other well developed metrics. It provides guidance on what a drug could be worth, both on an absolute basis and relative to other treatment options. It doesn’t set prices or prevent a drug from being made available by a public or private health plan. At most, it helps contain the prices of drugs that enter the market and points out cases of outright rip-offs.
Elsewhere in the world (pretty much everywhere) there are real forces limiting drug prices and impacting access. In the UK for example, the National Institute for Health and Clinical Excellence (NICE) decides which drugs and treatments will be provided to patients in the National Health Service. Sometimes drugs are rejected or their use is heavily restricted. On the flip side, patients don’t pay for the drugs that are approved.
In the US the drug pricing forces are heavily weighted in favor of higher prices. We shouldn’t fret about an entity like ICER.
Many drug companies have decided to play ball with ICER by providing data to help justify the value of their products. Some, like Vertex and Serepta have pulled back, saying ICER is biased against drugs for rare diseases. I don’t read ICER’s analyses that way.
The quality of ICER’s research is high, but of course the reports are limited by the data and analytical techniques that are available to the organization. The correct response is to build up the availability of real world evidence (RWE), especially from clinical registries that demonstrate how a drug actually improves (or doesn’t improve) the lives of patients. Patient-generated data and information from claims and electronic medical records can be helpful as well.
With better data we can have answers we are more confident in, and we can accumulate evidence on how drugs perform after they are launched, which can offer a refined understanding of their value.
Thanks to the 21st Century Cures Act, enacted in 2016, there is an increased demand for the generation of RWE. The industry is ramping up its spending on RWE for drug approval, safety monitoring, and reimbursement. New analytical techniques and enhanced data availability from wearable devices and other electronic sources are ushering in a heyday for RWE.
The Denver Post (Tracking your pregnancy on an app may be more public than you think) has published an interesting and disturbing article about the rise of Ovia, an app that collects detailed and personal data from pregnant women and those hoping to conceive. I’m not surprised that the business model is to provide data to employers about their workforce in order to save on medical costs and reduce time away from work. But I am a little surprised at how much data employees are willing to enter on topics like their sex life, color of cervical fluid, miscarriages and so on, while the app also track things like what medical conditions they looked up.
“Maybe I’m naive, but I thought of it as positive reinforcement: They’re trying to help me take care of myself,” said [Diana] Diller, 39, an event planner in Los Angeles for the video-game company Activision Blizzard. The decision to track her pregnancy had been made easier by the $1 a day in gift cards the company paid her to use the app: That’s “diaper and formula money,” she said.
As I remind people using “free” apps –or ones they are paid to use– you’re not the customer, you’re the product. There’s plenty written on this topic so I won’t bother to rehash it here, but it’s worth remembering that the data provided by Diller and others can be combined with tons of other data from their use of Google, Facebook, Waze, exercise trackers, and more to create incredibly detailed and personal profiles.
In 2008 I wrote a brief blog post called Baby formula in the mailbox. “Honey, is there something I should know?” I was puzzled to see that it still gets a lot of hits in 2019 and that readers are still commenting about their own experiences. Back then, an au pair who worked for us had received baby formula from Abbott Nutrition. Somehow, some marketer thought she was pregnant. It was kind of embarrassing and of course could be problematic for a family relationship or if the pregnancy had ended prematurely.
Online data gathering has come a long way in the past decade. If Abbott once guessed you were pregnant, imagine how much more they –or many others– knows about you now. Maybe the users of these apps aren’t naive, just fatalistic about the idea that everyone knows everything anyway, so why not just take the formula and diaper money and run?
In a few years, Diller’s child will probably find the Denver Post article or maybe even this blog post. If that person is you, I’d be interested to know how you feel about it.
An under-appreciated consequence of the BI-Lahey merger is that Partners now feels it can act with impunity. Until recently, Partners HealthCare dominated the Eastern Massachusetts market. As such it was the focus of government and public sector scrutiny and was somewhat constrained in its ability to act.
But now, Beth Israel Deaconess Medical Center and Lahey Clinic have received approval to consummate their merger. BI-Lahey and Partners are similar size, so now the pressure is off Partners to show restraint. In fact, it is taking the opportunity to catch up in some areas where’s it been lacking.
Partners chief financial officer Peter K. Markell said the merger didn’t trigger Partners’ plans to open new clinics. “I think we would have done it anyways — but it doesn’t hurt,” he said in an interview.
Partners and other hospital systems often charge facility fees at their outpatient locations.
“People like to talk about how big we are, but if you look at us geographically, we’re not well-rounded,” Markell said.
“We’re going to put a lot more focus on ambulatory growth,” he added.“That’s where we think the marketplace is going.”
I’m quoted in the middle of the article
“Partners is expanding in the most lucrative lines of business that they can — putting outpatient facilities in high-income suburbs,” said David E. Williams, president of the Boston consulting firm Health Business Group. “This is a very good way to make money. Previously, Partners might have faced more scrutiny for making these kinds of expansions, but now with BI-Lahey, they won’t get as much pushback as they might have gotten before.”
Partners is quite happy with the BI-Lahey merger. Those paying insurance premiums and healthcare bills are going to be a little less enthusiastic.
The combination of CVS and Aetna will work out great for the investment bankers and members of senior management who are able to cash out. Beyond that I’m skeptical about what value this colossus will add to the health care equation.
If the idea is to get health insurers to offer plans that favor retail clinics, why not just contract with those plans? Aetna is a big company but as a national plan its market share in many geographies is relatively modest. Often –like here in Massachusetts– the local Blue Cross has the biggest market share. If CVS is big and powerful enough to actually buy Aetna, surely it can get that company and others to come to terms on retail clinics.
