In this edition of #CareTalk, CareCentrix CEO John Driscoll and I discuss the impact of healthcare on the Democratic presidential race.
Category: Policy and politics
Question: How do you know when a non-profit healthcare organization is getting too big?
Answer: When it’s considering spending over $100 million to change its name.
Partners HealthCare was founded in 1994 when Massachusetts General Hospital and the Brigham and Women’s Hospital decided to team up (“partner”) to defend themselves against Blue Cross and Harvard Pilgrim, which for a brief moment had gained the upper hand as managed care caught on. As a new MBA at the Boston Consulting Group, I remember seeing the projections: MGH and the Brigham were going to be in trouble as Massachusetts copied California and drove down hospital utilization.
Insurance companies didn’t need to include both MGH and the Brigham in their networks–so they tried to play them off against one another to get better rates. That’s why Partners was created.
The two hospitals never wanted to merge and in the end they didn’t have to. The healthcare economy boomed, no one could exclude Partners from their network, and Partners was able to use its muscle to do very well in managed care contracting.
Partners got its act together and executed well, especially compared to its local academic and community-based competitors.
A quarter century later, the original partners have acquired several other hospitals and physician organizations. It’s the biggest private employer in Massachusetts by far, and rivals the state government itself in terms of workforce size.
Lately the company has had to deal with its success. Healthcare costs are a big issue in Massachusetts –as they are elsewhere– and Partners is in the crosshairs. The company is built for market power and clinical excellence, which does not lead to the lowest cost approach. And leaders within the Partners hospitals have been reluctant to cede authority to the central organization.
Something has to change. In particular Partners has to do a better job of integrating its various components –or so goes the conventional wisdom.
New CEO, Dr. Anne Klibanski was mostly recently the head of research for Partners. She’s touted as a great listener, and good at getting people to collaborate. But as I told the Boston Globe (New Partners Chief no stranger to role of uniter)
As a good listener, Klibanski could successfully unite the various factions at Partners. “On the other hand,” [Williams] said, “listening might not be the issue. Partners might need someone to bang people’s heads together.”
Now comes word that Partners is thinking of investing $100 million in changing its name to something more alluring like Mass General Brigham Health. It could be worth it to Partners by bringing the different factions together and for marketing and fundraising purposes. (For sure it will be great for branding and marketing agencies!) But what does that say about the state of healthcare in Massachusetts?
An expert quoted in the Globe (As Partners HealthCare rethinks its strategy, it’s considering whether to change its name) said it best:
“I don’t think those names matter to ordinary human beings who get health care in our state,” said Alan Sager, a professor at the Boston University School of Public Health. “The underlying fights about decentralized versus centralized power are internal matters for Partners. I don’t think they should plague the public with their own organizational anxieties.”
Partners has great hospitals and great people that make it the pride of Massachusetts. It does make business sense for Partners to consider rebranding. But that doesn’t mean it’s good news for the finances of those footing the bill.
The headline in today’s Boston Globe —Price watchdog’s influence on drug makers expands; As nonprofit assesses treatments, some fear it inhibits key options— could have been written by a drug industry lobbyist. [And maybe it was, since the online headline instead uses the squeaky phrase ‘mouse that roared.’]
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.
For seven years, Missouri has been the only state in the country without a prescription drug monitoring program (PDMP). PDMPs are designed to help identify abuse of controlled substances like opioids and to spot potential drug interactions.
Missouri doesn’t have a PDMP because one State Senator blocked the bill year after year by claiming the government might use the data to prevent people from buying guns. The Senator hit his term limit and there was expectation this year that the bill would finally pass, ending Missouri’s ignominious distinction as the lone holdout. Alas, a new group of six Republican Senators took up the mantle of their departed colleague and filibustered the bill again citing privacy and gun rights fears.
The lack of a PDMP is a problem for Missouri but also for surrounding states, which face blindspots in their systems as a result of not being able to share data with Missouri. A variety of local jurisdictions in Missouri have moved forward and are cooperating with other states, but the gaps are serious and have potentially lethal consequences.
The state ranks as the third biggest problem area in the country (only Washington, DC and Michigan are worse) for drug use so it’s not as though everything is working out just great.
Missouri is known as the “Show-Me” State, an expression that conveys the “stalwart, conservative, noncredulous character of Missourians,” according to the Missouri Secretary of State.
Most people credit the birth of “Show-Me” to a speech by a US Congressman in 1899. “I am from Missouri. You have got to show me.”
But there’s another, less flattering origin story, referring to scabs from Missouri who replaced striking Colorado miners around the same time. “That man is from Missouri. You’ll have to show him.”
The second story seems about right for the current situation as the state continues to display willful ignorance about the opioid epidemic. I could include something similar about the attitude toward guns, but on that issue Missouri is sadly more representative of the country as a whole.
Steve Wiggins has seen a thing or two in his more than three decades as a healthcare entrepreneur. His Oxford Health Plans introduced “pods,” a precursor of the Accountable Care Organization and he led HealthMarket, an early player in the consumer directed health plan space. He’s carried the same themes into his current role as founder and Chairman of Remedy Partners, the leader in Medicare’s Bundled Payments for Care Initiative (BPCI).
As you’ll hear in this podcast, Steve’s a big believer in bundles, offering them as a proven solution for a large portion of the healthcare dollar, within almost any healthcare financing framework from traditional commercial coverage to Medicare for All.
Here’s what we discussed:
- (0:18) What is a bundled payment? How does it relate to other new approaches like ACOs?
- (3:05) Did bundled payments start in Medicare rather than the private sector? If so, why?
- (6:52) How well has BPCI worked? What does the future look like?
- (11:01) How do episodes and bundles tie in more broadly? I often hear that chronic care or end of life care are the big cost drivers, not episodic care. Can those statements be reconciled?
- (15:10) How should we think about bundled payments and related topics playing into the campaign, or should we just give up on that?
- (19:14) You’ve founded quite a few healthcare companies over your career. How does this Remedy compare?
- (21:41) How do you expect the company to evolve in the next few years?