Author Archive

For Sale Cheap: Your Private Medical Information

Have you ever gone to a party and had the urge to peek inside your host’s medicine cabinet? (Neither have I!) Imagine what could be of interest in there. For those nosy souls who are tempted, you don’t even have to attend a party! It’s all for sale online. Bloomberg published an article about how Big Data is snooping in your medicine cabinet and selling the information to marketers. Here’s the gory details:

Dan Abate doesn’t have diabetes nor is he aware of any obvious link to the disease. Try telling that to data miners.

The 42-year-old information technology worker’s name recently showed up in a database of millions of people with “diabetes interest” sold by Acxiom Corp. (ACXM), one of the world’s biggest data brokers. One buyer, data reseller Exact Data, posted Abate’s name and address online, along with 100 others, under the header Sample Diabetes Mailing List. It’s just one of hundreds of medical databases up for sale to marketers.

Pesky Patients Asking Awkward Questions: Doc, Do I Really Need That?

A recent New York Times article lamented that employers are increasingly offering employee health plans that cover few medical expenses until a fairly high deductible has been met. About one-third of large employers offer only a high-deductible plan. Many other employers encourage enrollment in high-deductible plans by offering low employee contributions. As a result, more employees are covered by high-deductible plans and workers increasingly have to reach for their wallet before insurance kicks in.

As news stories often do, the article used a tear-jerker of an anecdote to drive home its point. The subject of the story was Anita Maina. Although her monthly premiums were only $34 per month, her deductible was $6,000 and her health savings account not well-funded. Here’s the story:

Anita Maina was working on an arts and crafts project she found on Pinterest — creating a table out of wood and cork — when she ripped off a fingernail while removing staples from a piece of wood.

But she ultimately skipped the [office] visit since she had not met the $6,000 deductible on her health plan, and she knew she probably did not have much left in her health savings account…

The New York Times article even included a photo of Ms. Maina with her injured finger!

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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!