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Another Bogus Attack on Wisconsin Medicaid

The Wisconsin Legislative Fiscal Bureau analysis estimates the state is losing about $100 million a year by not expanding its Medicaid eligibility as much as allowed under the Patient Protection and Affordable Care Act (ACA). This mudslinging by Wisconsin Governor Scott Walker’s gubernatorial challenger is disingenuous and ignores the fact that Wisconsin made a better choice by allowing many of its low-income uninsured to access private coverage with federal subsidies.

Over the past several years state legislators have grappled with the pros and cons of Medicaid expansion under the ACA. The carrot dangled in front of state legislators is financial; states that agree to expand Medicaid eligibility to 138 percent of the federal poverty level (FPL) can expect the federal government to reimburse states for most of the cost for newly eligible enrollees. Critics of Medicaid expansion counter that the savings are front-loaded in the early years, whereas state costs begin to rise in later years when it’s too late for states to back out. Whereas the federal government will pay 100 percent of the costs through 2016, the feds begin ratcheting the matching rate down to 90% by 2019.

Cost-Conscious Patients: Why Is That a Bad Thing?

An article in Modern Healthcare discusses the uneasy feeling doctors experience when patients ask awkward questions about the medical care recommended for them. Among the uncomfortable questions doctors are expected to answer: “How much is that going to cost?” “Do I really need that MRI?” “Why do I have to get that?” “Can it wait?”

Imagine how any other profession would respond when the purveyors of goods and services are expected to suffer the indignity of customers quizzing them about the merits, demerits and costs of their products. Oh, I forgot, every other profession does suffer the indignity of having to convince buyers that their services are valuable.

Hits and Misses

Women jogging

Jogging may be good for your heart: But endurance runners are more likely to die from heat stroke than a heart attack.

Big shrink is listening: A smart phone app that monitors your voice for signs of manic/depression.

There’s little reliable evidence that fish oil helps prevent heart disease.

Ridiculous study or common sense? Eating fruit and vegetables is associated with greater flourishing in daily life.

Your dog wears a watch: Why your dog seems to know what time it is.

CMS Views Medicare Solvency through Rose-Colored Glasses

The 2014 Trustees Report was released on Monday, July 28th. The Center for Medicare and Medicaid Services (CMS) press release paints a rosy picture, but fails to discuss the bad news that is hidden in plain sight.  According to the cheerleaders at CMS, the health of the Medicare Hospital Insurance Trust Fund has improved since last year. The Trust Fund purportedly will remain solvent until 2030 — four years longer than projected in the 2013 Trustees’ Report. The press release partially credits the 2010 landmark law, the Patient Protection and Affordable Care Act (ACA) with controlling the growth of Medicare spending.

The Trustees Report is supposed to project future Medicare spending based on current law. But, that also means the official projection includes provisions meant to slow spending growth that the Trustees know are unlikely to occur. In years past, the Trustees tended to ignore these uncomfortable facts. Around 2010 the Office of the Actuary at CMS took the unprecedented step of producing an Alternative Scenario report explaining that the assumptions in the Trustees Report were unrealistic, and the projection were most assuredly wrong. That raised eyebrows in the policy world. This year, the alternative scenarios (i.e. conditions that are more likely to occur) crept up from the appendix (at the back) and landed uncomfortable on page 2, with the authors explaining:

Paging Dr. Google

Laptop and StethoscopeThe Wall Street Journal reports that Google has begun a project called the Baseline Study to collect individual health information and correlate this with diseases conditions over time. The Google project leader, Andrew Conrad, is best known for his work on quick, cheap HIV screening of blood donations. At Google, Conrad supervises a team of 70-to-100 people, made up of physiologists, biochemists, and experts in optics, imaging and molecular biology. The goal is to amass a behemoth database of hundreds of different sample observations from thousands of individuals, including biology, genetics, blood chemistry, etc. and analyze how it correlates to disease patterns. According to the Journal:

The study may, for instance, reveal a biomarker that helps some people break down fatty foods efficiently, helping them live a long time without high cholesterol and heart disease. Others may lack this trait and succumb to early heart attacks. Once Baseline has identified the biomarker, researchers could check if other people lack it and help them modify their behavior or develop a new treatment to help them break down fatty foods better…

Hits and Misses

woman-with-childIf your parent died young, you may too! Death of a parent during childhood is associated with greater mortality in early adulthood.

Don your pith helmet and Bermuda shorts before heading to the burger joint: Eating meat contributes to climate change.

Empathetic people talk with their hands! (But hopefully not with their fists!)

Social media causes antisocial behavior: Facebook usage “is positively correlated with increasing divorce rates

There are regional variations in happiness: Residents of the Rust Belt cities are among the least happy residents of any U.S. city, but so are residents Gotham.

The Good, the Bad and the Ugly Truth about Specialty Drugs

Recently, my colleague Linda Gorman wrote about Sovaldi, a new treatment for Hepatitis C that actually cures about 90 percent of patients taking it within three months. A regimen of this drug costs $1,000 per pill — or about $84,000 for a course of treatment. Despite its high cost, drug maker Gilead Sciences argues the lifetime costs of treating patients with Sovaldi are lower than older, less effective drugs that merely suppress Hepatitis C, as though it were a chronic condition. The ability to actually cure the disease is a huge bonus, which definitely bolsters Gilead Sciences’ argument. When deciding how to price Sovaldi, Gilead Sciences undoubtedly took the efficacy and cost of competing drug therapies into account. For example, a liver transplant can cost $600,000.

But what if Sovaldi merely held the disease Hepatitis C at bay, and only as long as it was taken regularly? What if Sovaldi had to be taken 6 days a week — year in and year out — at a cost of more than $300,000 per year? That is the type of question Joe Nocera tackles in a recent New York Times article.

Writing in the Times, Nocera actually discusses another wonder drug, Kalydeco, developed by Vertex Pharmaceuticals. Kalydeco targets a specific subset of people with the genetic lung disease cystic fibrosis. For this small subset of patients, the drug works wonders. According to the New York Times:

…it is the first drug that attacks not just the symptoms but the underlying cause of cystic fibrosis, a genetic lung disease that usually kills victims by the time they reach their 40s. It doesn’t work for every sufferer of the disease, but rather for a small subset — probably around 2,000 people — who have a specific genetic mutation that the drug targets. But for those it helps, it is life changing.

Cost to Treat Cancer Drops 34 Percent When Physicians Package Price

An experiment by UnitedHealth Group tested bundled payments for cancer care. Another name for bundled payments that you might recognize is package pricing — where a vendor offers to group all costs together and lower the total price in an attempt to win a consumer’s patronage. Although common in every other industry where consumers buy services, package prices are quite rare in health care (except cosmetic surgery). Ordinarily, oncology doctors are given a fixed percentage markup on the cancer drugs they administer in their offices. For instance, a doctor administering an expensive drug would earn a proportionately larger fee than a doctor using a cheaper generic. UnitedHealth Group wondered if this perverse incentive translated into doctors using higher-priced medications rather than a cheaper drug that might be more effective.

The study found that over a 3-year period doctors who received bundled payments spent about one-third less treating cancer patients than if they had been paid a percentage of every oncology drug they used. Authors noted that while actual drug spending rose, total treatment costs were lower than expected. In other words, doctors weren’t skimping on drugs; they were choosing the most effective drug regardless of their commission.

This result should not be unexpected. What would be considered common sense or conventional wisdom in any other industry is considered novel in health care. The bottom line: incentives matter!

Should Doctors and Dentists Regulate Their Competitors?

An article in Modern Healthcare, “Should state medical boards be allowed to set scope-of-practice? Supreme Court will decide,” poses an important question that would seem like a no-brainer at first glance. Yet, the question deserves a second look. State medical boards are typically composed of members from the industry the board regulates. Thus, it’s common for these boards to take positions in the industry’s self-interest. At issue is an effort by the North Carolina Board of Dental Examiners to prohibit dental hygienists from performing teeth whitening services in mall kiosks, day spas and non-dental offices. Dentists who offer teeth whitening in their offices often supervise dental technicians and hygienists, who perform the actual service. Allowing those same dental technicians and hygienists to perform the work without the supervision of a dentist undercuts dentists’ prices and reduces their profits. According to Modern Healthcare:

The removal of stains from teeth can be a lucrative business for dentists. Starting in 2003, the dental board sent out numerous cease-and-desist orders to competitors who were accused of illegally practicing dentistry. The Federal Trade Commission (FTC) sought to encourage price competition for peroxide treatments by forbidding the state dental board in 2011 from taking action against lower-cost providers that offer teeth-whitening services. A federal appeals court upheld the FTC decision in 2013.

Hits and Misses

Variety of Medicine in Pill BottlesAdherence to drug therapy varies by both the color and shape of the pill!

Don’t clean out the litter box: Cat poop may fight cancer.

You look good on paper! Company will Photoshop your graduation pics to make you look slimmer.

Why is divorce more common among families with girls? (It’s not what you think)

Pincushion therapy: Acupuncture reduces hormonal “hot flashes.”

Health Wonk Review is up: “ObamaCare is creating uncertainty and increased government control of society, which holds down economic growth” says NCPA senior Fellow John R. Graham.