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Checklists and Physicians’ Behaviors

By Michael D. Miller MD
January 12th, 2010

I recently heard Dr. Atul Gawande talk about his new book “The Checklist Manifesto.” While the evidence demonstrating the value of checklists for improving the quality of healthcare is increasingly abundant, in his presentation Atul talked about how in a study assessing a surgical checklist they ran into resistance from about 20% of physicians.

Another story he told involved his surgical group’s considering how they might manage bundled reimbursements, e.g. accepting a single payment for all the care and testing related to thyroid cancer surgery.  Their discussions came to a screeching halt when it became clear that this “might” mean less money for each of the surgeons. This uncertainty in personal income arose because accepting bundled payments would require them to distribute money among the people and organizations involved in the actual surgery, the pre and post surgical testing, and the follow-up, which can be a very complicated process.

His group of surgeons probably found this change too daunting because they didn’t have an overarching group/entity to help them assess how to distribute/divide a bundled payment, and actually manage and monitor the money and their financial performance.  While they are part of Partners in Boston - a large integrated health system that includes the  Mass General and Brigham and Women’s hospitals - it seems that Partners hasn’t reached the point of providing this type of support for their individual medical groups.

In the broader world of health deliver reform, to manage such bundled payments effectively physician groups might need to become part of - or affiliate with/have relationships with - medical homes and/or accountable care organizations.  If every group of physicians - particularly in a single specialty - had to figure out on their own how to accept and manage bundled payments, it is very unlikely to work, leaving us with our current perverse incentives of fee-for-service reimbursements that promote volume over quality.

What these two stories have in common is that they involve the barriers to positive transformations of clinical medicine.  Specifically, fee-for-service’s financial incentives give many clinicians few reasons to change to bundled payments or other reimbursement systems that don’t prioritize volume and don’t reward quality outcomes. Similarly, increasing the use of checklists and other care improving protocols faces significant barriers because while they don’t attack clinicians’ incomes, they can be seen as assaulting their professional autonomy.

Change Agents and Care Delivery Transformation
Part of the solution to both these challenges are support mechanisms to assuage clinicians’ concerns about loss of income and autonomy.  The simplest way to conceptualize these support mechanisms is as “Change Agents.”  For bundled payments, clinicians need some trusted group or organization that can help them understand how they will be compensated, what information they will get and how to use it, and how bundled payments may actually simplify their professional lives and even potentially increase their incomes - assuming they can practice more efficiently and effectively. For example, because medical care has become so complicated - with an ever expanding array of advanced diagnostic and therapeutic options - the use of checklists and protocols can help clinicians standardize the routine parts of care and thus cognitively free them up to focus on patients’ individual needs and goals, including how to optimize adherence to treatment plans. These changes will improve clinical outcomes, which is what patients want, and economic outcomes, which is what society wants because it will help stimulate the economy and make it easier to expand insurance coverage and access to care.

While Change Agents to support the successful adoption of bundled payments may be some combination of administrative groups and other clinicians who’ve successfully used the new reimbursement scheme, Change Agents for care innovations are most often other clinicians.  Typically these clinician Change Agents have real world experience showing how the innovation has actually improved the quality of care - particularly by saving an individual life or preventing a specific adverse event. (Dr. Gawande’s research group saw this in their surgical checklist study, and I found this in researching the use of telemedicine in intensive care units.)

Patients as Change Agents
Patients can also be Change Agents.  As I’ve previously written, if patients asked their doctors if they use checklists for things like surgery and inserting central IV lines, and then refused care from physicians (or institutions) that don’t use such checklists, there would likely be rapid adoption of these and other innovations as they are validated and their value communicated broadly.  Advocacy organizations can also fill this role, as can government agencies as part of their quality improvement activities through programs such as Medicare, Medicaid and the Veterans Health Administration - something I’ve also raised in a previous post.

Conclusions
Improving quality and slowing the grow in healthcare costs will require multipronged strategies.  What these strategies will have in common is that they will confront the significant barriers clinicians have in changing how they practice medicine.  Achieving this will require Change Agents - clinicians, patients, advocates, and government agencies who can demonstrate and support the value of care innovations.  Simple? No. Possible? Yes.  But as the pair of old sayings go: If it was easy anyone could do it. And if it was easy, someone would have done it already.

Posted in Delivery of Healthcare, Economics & Financing, Quality of Care & Safety | 1 Comment »

Historical Perspectives on Health Policy: Part 3

By Michael D. Miller MD
December 4th, 2009

I just found my copy of the book “Improving Health Policy and Management” edited by Stephen Shortell and Uwe Reinhardt.  The book’s eleven chapters address many of the hot-button issues in today’s health reform debate:

  1. Creating and Executing Health Policy
  2. Minimum Health Insurance Benefits
  3. Caring for the Disabled Elderly
  4. An Overview of Rural Health Care
  5. Effectiveness Research and the Impact of Financial Incentives and Outcomes
  6. Changing Provider Behavior: Applying Research on Outcomes and Effectiveness in Health Care
  7. Health Care Cost Containment
  8. Redesign of Delivery Systems to Enhance Productivity
  9. Medical Malpractice
  10. Prolongation of Life: The Issues and the Questions
  11. Challenges for Health Services Research

The observant ready will notice one critical issue from today’s debate missing from this list… Information technology.  That is because this book was published in 1992… and actually the titles of the first and last chapters also included “in the 1990s.”

What this points out is that the fundamental issues of controlling costs, defining benefits, and improving efficiency in care delivery and through financial incentives are not new to the health care debate.  Reinforcing this historical reality, I recently ran into Professor Stuart Altman from Brandeis - who is one of the most insightful and clear thinking non-ideological health policy expert I’ve ever had the pleasure of talking to and hearing testify before Congress. And he told me on a rainy NYC sidewalk that he has been talking to people across the country about how the current debate is both similar to and different than the early 1990s, the 1980s, the 1970s….. and back to even the 1930s…and despite the ongoing delays he is hopeful that legislation will be enacted this time.

So while the issues haven’t changed, and likely won’t change no matter what legislation is enacted in the coming months, (and years), the hope is that this time around progress will be made so that health care becomes less of a national obsession, (and drag on the economy), and people and politicians can focus on life, liberty, and the pursuit of happiness, rather than illness, accessing needed treatments, and financial uncertainty.

Posted in Comparative Effectiveness, Federal Healthcare Reform, Health System Reform, HealthPolCom Blog, Miscellaneous | 1 Comment »

Historical Perspective on Health Reform - Part 1, Medical Effectiveness

By Michael D. Miller MD
November 16th, 2009

Since the time-line for health reform legislation has continued to be stretched, I recently spent some time cleaning out old files.  In my excavations I came across papers, articles, memos and briefing books which demonstrate that no matter how much things change, some aspects of health reform have stayed the same.  For example, below are a couple of snippets from memos about a proposed Medical Effectiveness Initiative from circa 1989:

Establishing a Medical Effectiveness Initiative at the OASH [Office of the Assistant Secretary of Health] level. (FY90 request = $52 million) This initiative would assess which medical treatments are cost-effective, and identify inappropriate and unnecessary medical practices. This knowledge would be used by reimbursing agencies in containing health care costs. [FYI – for budgetary comparisons, FY89 budget authority for the NIH was $7.15 billion, and $536 million for the FDA, and $141 billion for HCFA - now CMS.]

The Secretary’s Effectiveness Initiative for promoting the public health has as its goals:

  • improving the quality of health care received by Americans through the provision of effective, appropriate care, and involving the consensus of the medical community;
  • control of health care costs through elimination of ineffective and unnecessary medical treatments and comparison of the cost-effectiveness of alternative treatment modalities, thus insuring access to care;
  • enhancing the scientific basis of medicine through application of current technology (e.g. meta analysis; mainframe and software design) to the issues of medical treatment effectiveness; and
  • enhancing the competitive basis of the health care industry through provision of information to patients and providers on risks and benefits, including cost-effectiveness of medical treatments.

While the budgetary size of the proposal is very small compared to current initiatives, (e.g. the $1.1 billion for Comparative Effectiveness Research enacted earlier this year in the stimulus legislation), the wording and rationale for the proposals sound very similar - except that this initiative would explicitly use the information to alter government reimbursement  practices, which was precluded under the ARRA bill.

One difference that dates this language is the phrase “mainframe and software design.”  There have been significant advances in computer technology - which we now term IT - and these advances enable much better and rapid monitoring of quality, as well as and spending and utilization.  Such near real time quality and cost monitoring is important for implementing programs that provide cost and quality information to clinicians, patients, payers and others.  The ability to deliver analyses based on information which is days, weeks or maybe a month or two old, and reflects individual actions, is much more effective for changing behaviors and practice patterns than is data which is years old, and may be aggregated information for a population or across a region.  In addition, IT advances have made risk adjustment a much more robust process - if not exactly precise.  This is critical for the success of quality improvement and cost control programs because the first response from every clinician presented with information that the care they provide is costlier, or somehow lower in quality, than their peers’ practice patterns is that their patients are more severely ill than average and that explains why their costs are higher and outcomes poorer.

Next Up: Part 2 - Historical Perspectives on Universal Coverage and Cost Containment

Posted in Comparative Effectiveness, Delivery of Healthcare, Public Health | 1 Comment »

Off-Label Communications: Is More Less?

By Michael D. Miller MD
October 4th, 2009

Allergan corporation has filed a law suit against the Federal government challenging the FDA’s limits for companies discussing or promoting off-label uses of approved medicines.  This is not a new issue, but the news reports indicate that Allergan is going very old school and basing their legal challenge on Constitutional freedom of speech rights.

The issue is not can doctors and patients use approved medicines for conditions, (or in ways), which are not specifically approved by the FDA, but can companies discuss these off-label uses with physicians or provide them with published information about these off-label uses?

Competing Risk-Benefit Perspectives
The competing risk-benefit perspectives that surround this issue are nearly identical to the trade-offs that all stakeholders in biomedical research and development face - including the FDA, companies, patients, clinicians, and legislators:

  • Creating a landscape that protects individuals and public safety
  • Being flexible enough to provide clinicians and patients access to the best available treatment possibilities
  • Providing companies a reasonable market environment that creates incentives for developing new treatments and investigating new uses for already approved medicines, which also has marketing rules that are as clear as possible so companies can conduct business without being excessively concerned about straying into regulatory gray zones

Off-label use is common in clinical practice - particularly for disease areas like cancer - because it often represents the standard of care.  And in situations where a medicine approved to treat a common condition has an off-label use for a rare condition, the company has very little incentive to conduct the expensive and time-consuming clinical research to get the FDA to approve that rare off-label use.

There are a few key points underlying the issue of communicating information about off-label uses:

  1. The Constitutional freedom of speech rights for a company are not as expansive as for an individual
  2. The FDA’s regulatory authority focuses on the approval for sale and marketing of medicines, (and some other product areas), and not their use in clinical practice - with some very rare exceptions
  3. The FDA’s position about companies disseminating information about off-label uses has not be fixed in stone

On this last point, the 1997 FDA Modernization Act included a provision to expand the ability of companies to give physicians journal articles and similar material about off-label uses of approved medicines.  After that the Washington Legal Foundation brought a law suit seeking to expand off-label information dissemination.  And when the FDAMA provisions expired in 2006, the FDA proceeded with rule-making guidance to replace the FDAMA provisions, and this final guidance became effective in January 2009.

Not having read the details of Allergan’s legal challenge - and since the FDA doesn’t comment on current suits - it’s hard to assess the specific pros and cons of their positions.  But considering the extensive legislative and case law involving this issue, the company certainly seems to have a very steep hill to climb.  On the other hand, it would seem unusual that they would spend the time and money to bring a legal challenge unless they felt they had a chance to prevail. However, Allergan’s suit may have implications for the FDA, industry, clinicians, and patients for several or many years - even if they lose - because they may be making a pretty big splash in the policy pond with such a public challenge to change the rules for off-label promotion, and this will likely alter the landscape for any future actions.

I was involved with a somewhat analogous situation in the mid-1990s where a lot of groundwork had been done to prepare for a substantive debate about reforming a fundamental life sciences policy issue.  However, one company had an urgent and particular need for a legislative change, and they proceeded to pursue every reasonable and extraordinary avenue for getting the change they wanted.  The end result was that all our subsequent discussions were short-circuited because every policy stakeholder’s response upon raising this issue, was “Oh, I know about THAT issue,” with the implication that it was something they wanted nothing to do with because of the controversy the one company had stirred up with their expansive activities.  (I’ve purposefully not named the issue so as to not perturb anyone or any company about something that happened years ago.)

Collective Sausage Making
The moral of this story is that to make productive changes stakeholders within and across groups frequently need to work together. And if they don’t, the well can easily get polluted for everyone when policy makers avoid any action because they connect the issue to a nasty smell.  This may be another manifestation of the old adage, “the two things that shouldn’t be seen being made are laws and sausages.”

Happy Sausage Making - 2009

Posted in Delivery of Healthcare, FDA, Information & Communications, Quality of Care & Safety | No Comments »

Encouraging Communications About Patients’ Goals

By Michael D. Miller MD
September 18th, 2009

I attended a great event yesterday where experts discussed how to improve healthcare quality and safety by increasing patients’ involvement in making healthcare decisions.

This seminar, “Patient-Centeredness and Patient Safety: How Are They Interconnected,” was organized by the Kenneth B. Schwartz Center and sponsored by the Massachusetts Medical Society and CRICO/RMF.  Don Berwick (President & CEO of the Institute for Healthcare Improvement) was the main speaker followed by a panel consisting of two patient safety leaders from local hospitals and a patient involved with promoting patient engagement in quality improvement.

To start the event, Dr. Berwick discussed how his thinking about healthcare quality had evolved over several decades, and his increasing belief in the importance of patient involvement. He discussed his Health Affairs article on Patient-Centered care, and summarized his current thinking about how to design patient-centered care in 8 bullets:

  1. Place the patient at the center
  2. Individualize
  3. Welcome family and loved ones
  4. Maximize health influences within care
  5. Maximize health influences outside of care
  6. Rely on sophisticated, disciplined evidence
  7. Use all relevant capabilities - waste nothing
  8. Connect helping influences with each other

Communications Is Crucial for Achieving Patient-Centerdness and Goal Sharing
The essence of the panel’s discussion was about how to improve communications among patients and their clinicians so that each others’ goals were shared and understood.  One example raised by a panelist was initiatives to prevent patients from falling in the hospital.  Patients may see nurses being in bathrooms with them as intrusive or uncomfortable, but discussing their shared goal of not having patients fall and hurt themselves shifts the context of the nurse’s action and enables it to be embraced by the patient rather than resisted.

From the patient’s perspective too often clinicians may have their own ideas about what the goals of the treatment should be, but without understanding the patient’s life interests and goals the two may be disconnected.  For example, clinicians often ask patients what they do for work to understand if the treatment or the outcomes will be compatible with their jobs, but often patient’s happiness or life fulfillment is related to something outside of work, such as playing the piano, playing with grandchildren, rollerblading, hiking with their dogs in the mountains, or hang-gliding.  Treating a patient’s injury or illness so they can do (or be able to try to do) those activities may be very different than what would be indicated if the goal was to enable them to work in an office.

Creating Policies to Promote Communications and Goal Sharing
Dr. Berwick’s presentation also included a brief discussion of how evidence based medicine (EBM) can improve patient safety by avoiding unnecessary care and setting realistic expectations about the outcomes for chosen treatments.  This is captured in his 6th bullet above. One of the challenges in the current push towards more EBM - and comparative effectiveness research (CER) - is what to actually measure in this research. Combining the health system’s desire for optimal outcomes with patient-centeredness, (i.e., his 2nd bullet - “Individualize”), could be achieved by including the patient’s goals for their treatment as one of the outcomes measured in EBM and CER programs.

Benefits of Measuring Achievement of Patients’ Goals as an “Outcome”
Process measures, (such as percentage of patients who’ve received a recommended treatment), are usually easier to evaluate, but are really proxies for clinical outcomes.  Actual outcomes like mortality or hospitalization can be harder to evaluate, in part because of individual patient differences and thus the raw data needs to be risk adjusted. However, measuring achievement of the patient’s goals could be very important and valuable to add to these evaluations - and could be a rough way to inherently risk adjust the data, i.e. the “goals” of treating a broken hip may be different for a 50 year old person than someone who is 70.  The actual measurement of such goal achievement could be done based upon answering the question of “how well were the patient’s goals met?”  Clearly this would have to be quantified in some way - and perhaps that could be done by the patients themselves on an 11 point scale from 0-100%.

Not only would measuring this “patient goal achievement” outcome add a useful dimension to some research, but it would also put the question of “what are the patient’s goals?” right at the front of the patient-clinician conversation.  And in the context of health reform and system improvement, by using the dictum of, “we manage what we measure,” measuring how well delivery systems and clinicians are achieving patients’ goals could be an important force for transforming care delivery.

Bottom Line for Patients and Clinicians
The next time you’re a patient talking to a clinician, be sure to talk about your goals for treating whatever ailment caused you to see that clinician.  And clinicians need to tell their patients what goals they expect to achieve from the treatment they’re recommending.  This is the start of a conversation since the patient’s expectations may not be realistic - such as for a patient with a severe fracture who wants to run a marathon in three weeks.  But by understanding each others goals and expectations they can agree on what should be done and how to proceed.

Need for Continuity of Care and Primary Care Clinicians
Of course some patients may seek to “doctor shop” looking for a clinician who will promise to achieve their goals.  This can be good if the first clinician isn’t attuned to the patient’s wishes, but it can also be bad if the patient’s expectations are unrealistic.  That is why having a trusted relationship with a primary care clinician can be so important, since their PCC can help them evaluate and digest other clinicians’ recommendations.  Again, it comes down to ongoing and two-way communications to understand goals and jointly develop treatment plans and decisions.

Posted in Clinician-Patient Relationships, Comparative Effectiveness, Delivery of Healthcare, Economics & Financing, Information & Communications, Quality of Care & Safety | No Comments »

Real Health Reform in Massachusetts

By Michael D. Miller MD
July 29th, 2009

The Massachusetts Special Commission on Payment Reform recently issued its  recommendations for shifting the state’s health care system from Fee-For-Service (FFS) to Global Payments over a 5 year period.  The Special Commission’s report lays out a good case for making this change, describing why it needs to be adopted by all payers, (although each payer would still pay different rates, they would all use the same fundamental global payment structure), and some of the challenges for successfully navigating a 5 year transition period from the current mostly FFS system to one dominated by global payments.

The report summarizes its recommendations into 9 areas:

  1. The development of Accountable Care Organizations (ACOs). (Health delivery entities that can work as a team to manage the provision and coordination of care so that they are accepting responsibility for all - or most - of the care for their enrollees.)
  2. Patient choice. Patients will be able to choose their primary care physician, and will not be restricted to only clinicians in their ACO - but may have to pay more for services outside of their ACO.
  3. Patient-centered care and a strong focus on primary care. Each patient’s selection of a primary care provider will direct their insurer’s payments to their ACO, which will receive technical support to help develop/create medical homes.
  4. Widespread adoption of the medical home model. (The Special Commission concluded that “medical homes overlaid on the current FFS system cannot achieve its vision for a high-value health care system.”)
  5. Pay-for-performance (P4P) incentives to ensure appropriate access to care, and encourage quality improvement, evidence-based care, and coordination of care.
  6. Sharing of financial risk between ACOs and insurers. ACOs will be held responsible for performance risk—including cost performance and meeting access and quality standards. Insurance companies, (and self-insured companies), will retain the insurance risk for the insurance contracts written to groups and individuals.
  7. Strong and consistent risk adjustment. Global payments will be adjusted to reflect providers’ clinical and socioeconomic case mix, and, as appropriate, geography, so that ACOs will not be financially harmed by accepting high-risk patients with complex or chronic health care needs.
  8. Cost and quality transparency. ACOs will report performance against common metrics measuring health care quality and access to appropriate care.
  9. Participation by both private and public payers to ensure consistent alignment of care delivery incentives and to minimize administrative complexity and costs.

These changes would have tremendous implications for improving quality and controlling costs, and be much more significant than the coverage expansion the state started in 2006 - which could be viewed as the first part of health reform in Massachusetts, with the movement to global payments as the second part.  Specifically, the Special Commission’s recommendations could largely accomplish the somewhat wonkishly termed goal of “bending the curve” in health costs that is being bantered about in DC these days.  These changes would achieve that aim by shifting the financial incentives for clinicians and provider organizations from providing more care, to providing higher quality and more cost effective care - which should include more preventive services and interventions.

Incentives Need to Be Translated to Small Groups
However, those goals will only be achieved if the incentives created at the ACO level by global payments and P4P are translated to much smaller groups of clinicians and others within each ACO.  If clinicians are still compensated based upon a modified FFS system within the ACOs, then their incentives will still be mostly for volume over quality.  Similarly, if they are told that their compensation will be based upon the overall performance of the ACO, then they won’t feel that their actions will be significant enough to effect the ACO’s or their own financial success or failure.  (This is the reason why Medicare’s Sustainable Growth Rate formula hasn’t constrained the growth in Medicare’s spending for physician services, i.e. why would physicians feel that their individual actions matter when they are pooled in with hundreds of thousands of other physicians across the country?)  In contrast, if the incentives and data monitoring are done at the level of the individual clinician, (or small clinical entity), then each individual can understand how that their actions will influence their own success or failure.

Just as creating granular incentives depends upon monitoring the clinical decisions and activities at the same level, there is also a need to monitor the overall operations and quality performance of the ACOs to be able to adjust global payment amounts and methodologies.   This is why analyzing data to support individual and ACO decisions, and monitoring the success of movement toward global payments, are two of the major functions (see #3 & #5 below) for the entity the Special Commission recommends be empowered to oversee the transition to global payments across the state.

Special Commission’s Recommended Functions for Transition Oversight Entity:

  1. Establish the methodology for global payments
  2. Establish the parameters defining an ACO
  3. Analyze health system data to support providers, patients, and employers in making coverage and care choices
  4. Recommend the necessary infrastructure support for providers
  5. Establish transition milestones and monitor progress towards those goals
  6. Identify and implement mid-course adjustments as needed

Implications for National Actions and Health Reform Advocates
Up here in my area of neon-blue Massachusetts, the focus has been on how it is essential to have a “strong public plan option” because that will lead to a single payer system.  Many community activists have held onto this position despite Massachusetts making significant improvements in coverage without a public plan option, (or single payer), but if the state of Massachusetts can implement the Special Commission’s recommendations for an all-payer global payment system in ways that transform healthcare delivery, it will be the most significant health reform initiative in the United States since the creation of Medicare and Medicaid in 1965.

Yes, that’s my opinion, but I can defend it for several reasons.  First, implementing an all-payer global payment system really can’t be watered down too much.  Certainly, for example, the large teaching hospitals - which the report indicates are doing financially better than community hospitals - may continue to do better under a global payment system, but fundamentally global payments, (with associated incentives for quality), will transform FFS incentives for volume of care into incentives for efficiency and quality.

And second, shifting the healthcare delivery system’s fuel source from FFS to global payments should cause clinicians and health providing institutions and organizations to reorganize themselves into forms, (i.e. ACOs and their subsiadary building blocks), that can accept global payments and effectively manage care. (If they don’t then they will likely find that their global payments aren’t covering their costs, or their quality of care falls behind those who do effectively reorganize their care delivery structures and incentives.)

The Commission uses the term Accountable Care Organizations (ACOs) to describe these types of conglomerations, but each ACO will certainly have its own unique structure derived from the components that were woven together to form it.  (I like to call these Multiform Accountable Care Organizations or MACOs.)

Maco Shark 2~Maco Shark

While health reform is often talked about as if it would create the same structures and options across the country, this variety will be good a thing since it will reflect local cultures, as well as the unique characteristics of the local providers, clinicians, payers, and community leaders, and their relationships.

While Massachusetts has been pointed to as a model for national health reform - and the state should be proud of achieving near universal coverage - shifting the health system’s fuel source from volume to quality will be a much more profound achievement with longer lasting implications. After taking significant steps to increase insurance coverage to >97%, payment reform and delivery system transformation are the next logical tandem steps. Nothing else being discussed at the Federal level or in other states would have as sweeping an impact as going to an all-payer global payment system. (Yes, there are Federal and state demonstrations and pilot programs for medical homes and other more focused types of bundled payments, but they are toe-dipping rather than diving-in initiatives.)

Next Steps
The state legislature is expected to start hearings on the Special Commission’s recommendations in September.  At this point the major stakeholders - including insurers, doctors, and hospitals - are supporting the recommendations. Health reform advocates should start paying attention and figuring out how to mobilize support for the legislature to implement these recommendations so that no matter what happens with Federal reform, Massachusetts will be ahead of the curve in taking real steps to bend the spending growth curve. And if there is no Federal legislation this year, Massachusetts will be even farther ahead of the curve and positioned to lead the rest of the nation as well as create a more economically attractive environment for starting businesses and creating jobs - while improving the quality of healthcare.

Posted in Delivery of Healthcare, Federal Healthcare Reform, Health System Reform, Quality of Care & Safety, State-Level Healthcare Reform | 5 Comments »

Biotechs Biting the Dust

By Michael D. Miller MD
July 22nd, 2009

On Tuesday, Epix Pharmaceuticals announced that they were dissolving.  And unlike many innovative life sciences companies, they’re not being acquired by another company to take advantage of their research, nor are they evaporating because their one line of research failed in clinical development.  Rather, they’ve just run out of money, can’t raise any more, and their assets are worth less than their debt.  So they’re selling off what they can, and locking the door behind them.

While the company’s announcement isn’t too reveling about their history, looking at their information on Yahoo! Finance shows that while they have consistently lost money, (as do virtually all biotech companies without products to sell), year-over-year, revenue was increasing and the losses were shrinking.  And the company’s profile described various areas of clinical development:

“EPIX Pharmaceuticals, Inc., a biopharmaceutical company, engages in the discovery and development of therapeutics through the use of its proprietary silico drug discovery technology to treat diseases of the central nervous system and lung conditions. Its therapeutic product candidates in development include PRX-03140, which completed Phase II clinical trials for the treatment of Alzheimer’s disease; PRX-08066, a small-molecule inhibitor that completed Phase II clinical trials for the treatment of pulmonary arterial hypertension and pulmonary hypertension associated with chronic obstructive pulmonary disease; and PRX-07034, which completed Phase I studies for the treatment of cognitive impairment associated with schizophrenia. The company also offers Vasovist, an injectable intravascular contrast agent to provide enhanced imaging of the vascular system using magnetic resonance angiography. It has collaborations with SmithKline Beecham Corporation, Amgen Inc., and Cystic Fibrosis Foundation Therapeutics, Incorporated. The company was formerly known as EPIX Medical, Inc. and changed its name to EPIX Pharmaceuticals, Inc. in 2004. EPIX Pharmaceuticals, Inc. was founded in 1988 and is based in Lexington, Massachusetts.”

The Boston Globe also had an article about Epix’s demise, which also noted that Biopure, another Massachusetts life sciences company announced it was going under last week - however Biopure, which had been working on a blood substitute, was much more of a “one trick pony” than Epix.

Last fall I’d written about how biotech companies were treading water because of problems raising new money, and while several other smaller companies have been acquired, I don’t recall hearing about such a previous high profile company completely dissolving.  The ongoing challenge in the current economic quagmire will be for start-ups to find their initial funding, and to see if larger biotech and pharma companies can be enticed by science and economics to buy any of the remnant companies - although with the Merck/Schering-Plough and Pfizer/Wyeth pending combinations, those major players most likely won’t be in the market for new acquisitions anytime soon.

Posted in Economics & Financing, Innovation, Patents & IP | No Comments »

Diabetes Updates - New Diagnostics, Increasing Rates, and Implications for Health Reform, CER, etc.

By Michael D. Miller MD
June 17th, 2009

Changes in the diagnosis and treatment of diabetes is a great example for understanding how healthcare delivery constantly evolves based upon new discoveries.  And the history of these changes may help illuminate some thinking about health reform and the development and use of comparative effectiveness research (CER).

First, a little background on diabetes.

Diabetes Background
Diabetes mellitus (or “sugar diabetes”) occurs when the body has problems regulating the level of sugar (specifically glucose) in the blood.  This can be because the body’s pancreas doesn’t produce enough insulin, or for some reason the person’s organs become resistant to the actions of the insulin that is present - or sometimes both occur simultaneously.  Impaired control of glucose means that the levels get too high, which produces problems in the eyes, (leading to blindness), in the kidney, (leading to kidney failure), and in the small blood vessels elsewhere in the body, which can lead to nerve damage and low oxygen delivery to the extremities - particularly the legs and feet, (leading to amputations).

In olden times, diabetes could be diagnosed by sugar in the urine.  (Medical lore says this was done by taste….)  However, until insulin was discovered in 1921 there were no therapies for severe insulin deficiency.  And even once insulin became available, sugar in the urine was still the way diabetes was diagnosed and monitored - usually with a dipstick that changed color depending on the sugar concentration.

It wasn’t until the 1960s that measuring blood glucose levels became possible - and only then in the doctors’ offices because the machines were large and expensive.  In the 1980s machines small and cheap enough for patients to monitor their blood sugar levels at home became available.  This enabled patients to start adjusting their own insulin dosages based upon their blood sugar levels.  (Before this it was too dangerous for patients to significantly alter their insulin dosages because while too little insulin leads to too high sugar levels causing long-term damage, too much insulin can drop sugar levels too low and lead to confusion, coma and death.)

In more recent years it was discovered that keeping diabetics’ sugar levels near normal could prevent essentially all the adverse consequences of diabetes, i.e. blindness, renal failure and amputations. But doing this based upon finger-stick blood sugar levels even 3 and 4 times a day was tricky - and those were just single data points.  So in the mid 1970s it was proposed that monitoring the amount of hemoglobin in the blood that had combined with glucose would give a measure of the average blood sugar level for the 2-3 month life of the red blood cells.  (It was known that glucose irreversibly connects to the hemoglobin in red blood cells in a way that directly correlates to the blood sugar level.)  This test, known as “glycosylated hemoglobin, (or HbA1C, or simply A1C), has been increasingly used over the past few decades to monitor diabetics and adjust their treatments, with the goal to keep A1C levels below 7%, since the level in people without diabetes is 4-6%.

Care Lags Discovery and Development of Innovations
Despite improved ability to monitor diabetes, it is still under diagnosed, and poorly managed.  It is estimated that there are about 6 million people in the US who have diabetes, but don’t know it - which is about 25% of all people with diabetes.  And in 2003-2004, only about 57% of people with diabetes had A1C levels <7%.  (The medical and lost productivity costs for all people with diabetes may be approaching $200 Billion.)

And the prevalence of diabetes is increasing - and with it so are the costs of treating people with diabetes. Last year I wrote about this, and now the CDC has updated information showing the continuing growth in the number of people in the US diagnosed with diabetes:

Increasing Rate Diabetes in the US 1980-2006
Source: http://www.cdc.gov/diabetes/statistics/prev/national/figpersons.htm

The treatment of diabetes has also changed.  After insulin was discovered, different forms and modifications where developed to change how quickly it acted, and beef and pork sources have been replaced with biotech “human” insulins grown in bacterial cultures. Many different types of non-insulin treatments for diabetes have also been developed - these act primarily by increasing insulin production from the pancreas or the action of the insulin in the body.

Which brings us back to the A1C test.  An International Expert Committee from the American Diabetes Association is now recommending that the A1C test be used to diagnose diabetes.  This would replace (or supplement) the traditional fasting blood glucose diagnostic test, and the A1C test would still be used for twice yearly monitoring of the adequacy of treatment for people with diabetes.

These developments in diagnosis and treatment have progressed in tandem - each leveraging off the knowledge gained from the other - with the A1C test being part of the continuing evolution of tests for diagnosing diabetes.  For example, the fasting blood glucose level for diagnosing diabetes has changed over the years.  It was originally set at 140mg/dl in 1979, and then lowered to126 in 1997, when it was also decided that a level between 110-126 should be considered pre-diabetic, or “impaired fasting glucose.” And in 2003 the lower bound for “prediabetes” was lowered to 100.

Why A1C Now?
While A1C testing has been used for years, there have been problems in standardizing the measurement. (This is discussed in the ADA paper linked to above.) But now A1C measurement inconsistencies, (which occur for all lab tests), have been narrowed sufficiently so that the ADA committee is recommending that an A1C level of >6.5% be used to diagnose diabetes, (for patients who are not pregnant and do not have hemoglobin abnormalities - these can change HbA1C levels significantly), and that people with A1C levels >6.0% and <6.5% be considered to have “subdiabetic hyperglycemia” because they have a significant risk of progressing to diabetes.

So Back to Health Reform and CER - The Challenges Ahead
The challenges ahead are to make sure that we continue to utilize future discoveries in a timely and intelligent way. Which finally brings us to health reform and CER. Health reform that expands insurance coverage should dramatically improve the diagnosis and treatment of people with diabetes - which should also help control other healthcare and societal costs because poorly controlled diabetes leads to many other costly problems.  However, immediate cost pressures present barriers to using the best diagnostic and therapeutic interventions.

Comparative effectiveness research is supposed to provide information about the best interventions, but as has been seen with advancements in diabetes, what is best often changes in progressive leaps based upon new discoveries.  And one of the limitations of CER, (and all research for that matter), is that it takes time to do the work and analyze the results.  Therefore, research really provides information about what was the best when the research started - which could have been several years before the results are known and disseminated.  And this time lag effect can be even longer when the research is based upon previously published studies or analyses of clinical records.

The lesson here is that while CER and similar research can provide very important and useful information, it must be put into the proper historical and clinical contexts.  What was state-of-the-art when the research protocols were developed may be 2, 3, 4 or more years out of date when the data is analyzed.  This reality needs to be considered when such information is used for coverage and reimbursement, and decisions about health delivery and financing system redesign.

I am confident that most insurers are not paying for A1C tests to screen people for diabetes - and that it will likely take a year or more for even the most progressive insurers to do so…. but they eventually will.  Which raises the question, what did they gain by waiting?  And what did they, (and the patients), lose?

Addendum: The hospital lab my doctor uses charges $59 for a HbA1C test.  So assuming that price doesn’t come down if more people are getting the test, the calculation needs to be made as to what is the ROI for using HbA1C as a screening test?  And the CER questions are how to identify people who would most likely benefit from HbA1C screening, and how to determine how frequently the screening should be done?

Posted in Comparative Effectiveness, Delivery of Healthcare, Economics & Financing, Health System Reform, Information & Communications, Quality of Care & Safety | No Comments »

Savings from Comparative Effectiveness Research

By Michael D. Miller MD
May 28th, 2009

The May 23rd issue of National Journal has two very interesting pieces about Comparative Effectiveness Research.

Scoring Savings from CER:
The first is in an interview with CBO Director Doug Elmendorf which includes this Q&A about scoring savings from CER:
“NJ: In the first five years after studying comparative effectiveness, are the savings that CBO can find relatively small?
Elmendorf: The estimates that we’ve done in the past suggest that by the 10th year, you are saving about as much as the cost of the research itself.  By the fifth year, you are not.  We would expect there to be savings in the private sector.  The federal government captures only a piece of that through the tax effect.  What I haven’t told you about is the net effect of comparative effectiveness research on national health expenditures.  That will tend to be a net saver for the country sooner.”

CER in Health Reform:
The next article in the NJ issue, (“The Risk of Comparing Treatments”), is about the possible inclusion of a new agency or independent institute to conduct or oversee CER. The legislative fate of such organization may hinge upon how CBO scores increased or continued funding for CER, and as seen above, it seem unlikely that CBO will attribute large savings to CER.

While scored savings from CER may be small, the fight about how CER should be used is getting hot.  The NJ article also discusses two new organizations that sound somewhat similar, but are actually on opposite sides of this issue: The Partnership to Improve Patient Care, and the Alliance for Better Health Care.  The former includes innovative companies and groups from industries such as biotech, pharmaceuticals and medical devices. While the latter includes health insurance plans, physicians and others.

Interestingly, patient organizations are divided between the two, with more disease specific groups who place a high value on the discovery of new treatments are aligning with PIPC, while broader “consumer” organizations that prioritize better information about existing therapies have signed on with ABHC.  Similarly, biomedical researchers could be viewed as split about CER, with academic researchers viewing the $1.1Billion in new CER money in the stimulus bill as a great opportunity for more funding, while industry researchers understand that the use of CER to make reimbursement and coverage decisions could reduce the incentives for investors to fund innovative private sector R&D.

So stay tuned.  The next event in the CER skirmishes will likely be around what the Finance Committee includes in their legislation about a new agency or institute for CER in the bill they are expected to unveil in a week or two.  Look for this issue, and other aspects of CER, to fuel one of the more interesting controversies within the health reform debate this summer.

Posted in Comparative Effectiveness, Economics & Financing, Health System Reform, Information & Communications | No Comments »

People in Health Reform & Transformation

By Michael D. Miller MD
May 20th, 2009

The importance of the “people factor” in improving the quality and efficiency of healthcare is well understood by experts in health information technology (HIT) and healthcare delivery transformation.  In estimating the time and cost for implementing new technologies or processes, they appreciate how behavior change and technology adoption are very time consuming and expensive – factors that are often glossed over in policy discussions.

David Brooks’ recent Op-Ed in the New York Times about the personality traits of CEOs leading successful companies sheds some light on the people factors in health reform.  Contrary to a lot of the common wisdom about the importance of good personal connections with coworkers for success in the corporate world, Brooks cites information that the most important factors for successful CEOs are “execution and organizational skills. The traits that correlated most powerfully with success were attention to detail, persistence, efficiency, analytic thoroughness and the ability to work long hours.”

He goes on to state that what produces effective CEOs are “emotional stability and, most of all, conscientiousness — which means being dependable, making plans and following through on them.”

In the medical world, this would describe most surgeons, but the difference between the corporate and medical worlds is that CEOs have greater direct control over their people and organizations than do the leaders of health delivery organizations like hospitals or clinics, which rely on the performance of many different professionals and skilled staff who function quite independently, such as doctors, nurses, and many types of therapists.  Thus, while “being a good listener, a good team builder, an enthusiastic colleague, a great communicator [does] not seem to be very important when it comes to leading successful companies,” in the clinical world, these traits are very important.

Brooks’ comment that, “business leaders tend to perform poorly in Washington, while political leaders possess precisely those talents — charisma, charm, personal skills — that are of such limited value when it comes to corporate execution,” correlates very well with my observations of senior corporate managers, politicians and clinicians.  I have seen business leaders who are successful in working the political circuit but have struggling corporate organizations, and politicians who enter the business world – often as leaders of lobbying or policy organizations in Washington DC – whose operations are chaotic and inefficient.

However, there are a wide variety or organizations in the healthcare universe’s 4 spheres, and the leadership qualities best suited for increasing quality and efficiency depend upon the sphere the organization is operating in, the type of organization, and the local culture.  For example, leading a biotech, medical device, diagnostic, HIT, or pharmaceutical company requires the type of hyper-focused “boring” CEO described in Brook’s column.  But successfully leading a hospital, clinic, or private medical office requires someone who has relatively stronger people skills.  And someplace in the middle would be the leadership of health plans which have to bridge the business and clinical worlds, and leaders of government agencies which have to straddle the policy and political arenas.

Keeping the importance of the people factor in mind while developing health reform and transformation proposals will help create realistic expectations and time lines – both for the actual transformation of care delivery and the ability to achieve cost savings.  For example, as CBO noted a year ago - and I’ve previously commented on - the ability of health information technology to achieve cost savings is dependent upon how those technologies actually change behaviors of clinicians, patients, and others - a process which is very time consuming and expensive.

Posted in Delivery of Healthcare, Health System Reform, Information & Communications, Quality of Care & Safety | 1 Comment »

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