Category: Health Care Finance

What Is a (Big) Bird in the Hand Worth?

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by Suzanne M. Rivera, Ph.D.

The Presidential debate on Wednesday was fascinating theater.  Much of the post-debate commentary in social media has focused on Mitt Romney’s threat to cut federal funding to PBS as a way of reducing the deficit (save Big Bird!) and President Obama’s unexpected restraint (including this piece of NSFW satire from The Onion).

I love Big Bird as much as the next child of the Sesame Street generation, but I’m even more concerned about something else.

Very little attention has been paid to the fact that neither candidate said much about science.  Because I was listening closely for any reference to research or innovation in medicine and healthcare, I can tell you this: the closest either candidate came to making a claim in this area was President Obama who (I think) intended to say something like, ‘Cuts to basic science and research would be a mistake.’ Read More

The Use of Electronic Health Records Is Increasing Medicare Billing: Is It Also Increasing the Amount of Care Physicians Provide?

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 By: Katie Booth

The New York Times recently reported that the switch to Electronic Health Records (“EHRs”) may be contributing to rising Medicare costs. The Times described two hospitals where the portion of patients billed at the highest reimbursement rate rose by over 40% when the hospitals adopted EHRs. The Times also reported that in hospitals that switched to EHRs between 2006 and 2010, Medicare payments rose 47%. Medicare payments for hospitals that did not adopt EHRs rose 32%.

There are several potential explanations for this increase in billing. One is that doctors are simply doing a better job electronically recording the same care they’ve always given, leading to higher Medicare billing. Another is that some doctors are abusing the EHR system by upcoding patients or copying and pasting examination histories, fraudulently increasing Medicare billing.

A third explanation is that EHR systems actually change the way doctors practice medicine. In the process of asking doctors for particular data points, EHR systems may remind doctors to look for particular symptoms or to provide particular treatments that doctors may not have considered otherwise. It is thus possible that EHRs have led to higher Medicare bills because they have increased the amount of time doctors spend diagnosing and treating patients.

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A Question of Insurance Fraud?

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By Scott Burris

No, I mean it: this is a question to Bill of Health readers who know about the law on this topic.

This week, a colleague handed me a palm card she’d been given at a subway station here in Philadelphia. “Cash for diabetic test strips” it read.  Comparing prices on the company’s website with prices on Wal-Mart’s pharmacy page, it looked like the test-strip buyer pays about 20 cents on the dollar for “pre-owned” test strips.

The palm card and the website both stipulate that the strips be unexpired and in their original, unopened, factory-sealed boxes.

So, one asks, are there enough people out there who buy more diabetic test strips than they need, and are willing to take an 80% loss to ensure they are used by someone else? That seems unlikely.

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Innovative Approaches to Pharmaceutical Innovation: Alternative R&D Mechanisms

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by Adriana Lee Benedict

Earlier this year, the World Health Organization’s Consultative Expert Working Group on Research and Development: Financing and Coordination (CEWG) issued a report calling for, inter alia, increased support for innovative pharmaceutical R&D funding mechanisms.  Although lack of financing has posed a challenge to implementation of alternative approaches to R&D, the increasing pace of pharmaceutical innovation has certainly spurred significant innovation in this realm.  These approaches can be broadly categorized into “push” and “pull” incentive mechanisms.

“Pull” mechanisms–such as advance market commitments, prize funds, and expedited regulatory review—reward R&D outcomes by facilitating translation of innovation to marketable products.  Several “pull” mechanisms have yet to be tested.  For instance, pay-for-performance mechanisms, such as those contemplated by the proposed Health Impact Fund, would use government and donor financing pay for performance in lieu of normal profits gained from market exclusivity.  Other untested ideas include patent buy-outs, transferable IP rights and market exclusivity, reduction of patent length, and “optimal hedging to smooth public health expenditures”.

“Push” mechanisms, on the other hand, fund R&D at earlier stages. Patent pools, for instance, bring patents into a collectively owned and managed pool that can issue voluntary licenses to generic companies for product development. Other “push” mechanisms that have seen some success include targeted disease-specific funding, health innovation networks for the “Global South”, capacity-building and technology transfer initiatives, open-source and crowd-sourced R&D for neglected and rare diseases, and private-public product development partnerships.  “Push” mechanisms that have been proposed but not yet tested include taxes on patents; proportional, tiered or stage-specific partial prizes; and making undisclosed clinical trial data an international public good. Innovative financial proposals that de-link R&D investment from profits include linking donor funding to technology transfer commitments, cost sharing for clinical trials, for-profit investment partnerships, neglected disease and global health tax credits, and additional fees on patent applications (called “Green IP”).

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Taking Liberties (and Libertarians) Seriously

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By Abby Moncrieff

First, an uncontroversial statement: Despite academics’ resistance, libertarian arguments played a huge role in the Supreme Court’s Obamacare decision. That seems obvious. Chief Justice Roberts and the four dissenters based their Commerce Clause analyses largely on notions of individual freedom, asserting that the federal government should not be allowed to force individuals to purchase private products.

But to heath scholars, that line of analysis is incredibly irksome and even a bit dissonant. Health insurance isn’t like ordinary private products, we cry; it is intimately connected to health care regulation, and forcing people to have health insurance, unlike forcing them to buy (or even eat) broccoli, will make them healthier! Congress made this point explicitly, finding that “[t]he economy loses up to $207[ billion] a year because of the poorer health and shorter lifespan of the uninsured”! Failing to eat broccoli doesn’t make you unhealthy the same way that failing to carry insurance does, especially if you’re substituting broccoli with green beans instead of donuts. And eating broccoli doesn’t make you healthy the same way that carrying insurance does, especially if you’re also eating steaks (or eating more than 2000 calories a day of pure broccoli). So, Supreme Court, you just got it wrong. The individual mandate isn’t a crass attempt to get people to buy something. It is, like countless other uncontroversial provisions of the U.S. Code, an attempt to improve the health and longevity of the American people. If you don’t think Medicare (or a Certificate of Need law) infringes liberty, you shouldn’t think the individual mandate does.

Here’s the problem: The Solicitor General didn’t make that argument.

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NEJM: Cutting Family Planning in Texas (and more)

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Our friends over at the New England Journal of Medicine just alerted us to a new perspectives piece addressing the impact of cutting family planning funds in Texas (the piece was also picked up by Politico).  The authors interviewed 56 leaders of organizations throughout the state that provided reproductive health services using public funding before cuts went into effect, and what they found was disturbing:

  • Most clinics have restricted access to the most effective contraceptive methods because of their higher up-front costs (choosing pills over IUDs or subdermal implants).
  • Clinics have started to turn away those who canot pay, when previously their visits would have been covered by public funds, and women who can pay the newly instated fees are choosing less effective methods and fewer tests to save money.
  • A number of clinics have lost their exemption from Texas’ law requiring parental consent for teens under 18 who seek contraceptives.

Overall, the authors conclude that laws intended to defund Planned Parenthood in an attempt to limit access to abortion (even though federal and state funding cannot be used for abortion anyway) have resulted in policies limiting women’s access to range of preventative reproductive health services and screenings.

Alta Charo weighs in via a NEJM podcast, discussing the future of reproductive health care for women in the US, particularly in light of upcoming elections (as well as the article we discussed last week on conscientious action, and other general issues in reproductive health policy).  Take a listen!

And one more NEJM plug for now: our Bill of Health blogger Kevin Outterson also has a podcast online discussing the record-breaking settlements of pharmaceutical fraud cases and the need for further regulation.

Written on The Body: Reflections on Reactions to Funding Sex Re-Assignment for Prisoners

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By Glenn Cohen

Last week, as I mentioned before, Judge Wolf (D. Mass) ruled that Michelle Kosilek, who was born as a man but has received hormone treatments and lives as a woman in an all-male prison, was entitled to the sex re-assignment surgery that the Department of Corrections’ doctor ordered as the treatment necessary for Kosilek’s Gender Identity Disorder.  The court found this result compelled by the 8th Amendment of the U.S. Constitution after accepting a finding that Kosilek was at risk of serious self-injury. Kosilek is serving a life sentence for murdering his/her wife.

The ruling has been very controversial. The question is why? On one level this might be thought of as a general reflection of antipathy towards murderers, or towards the transgendered.  But I think if we cut deeper there are three more interesting things that might be going on. I say “might” very explicitly, treat these as hypotheses, and certainly don’t mean them to be exhaustive.

Here they are:

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MA Health Reform and Medical Debt – Getting the Facts Straight

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by Rebecca Haffajee 

Earlier this week, the Boston Globe reported that medical debt is still a problem in Massachusetts, with scant change since the implementation of health reform legislation in 2006. Specifically, the article reports that of approximately 3,000 adults surveyed in 2010, 17.5% had trouble paying medical bills in the past year and 20% were carrying medical debt and paying it over time, statistically insignificant changes since 2006. The source of this finding is the Massachusetts Health Reform Survey (MHRS) funded by Blue Cross Blue Shield of MA Foundation, whose latest results published in January 2012 track annual trends from 2006 – 2010. The Globe story seems to suggest that in the absence of reductions in medical debt, health reform is failing to achieve one of its goals. The survey findings, however, don’t present a story of causal inference; they (at best) identify a loose association.

Just to recap some basics of MA health reform: the law required most residents to obtain insurance. It established Commonwealth Care through the Health Connector – an exchange of sorts – so that low income residents not eligible for Medicaid could qualify for a subsidized plan.  The Connector also offers Commonwealth Choice non-subsidized plans for individuals and employers.  Since passage of the law, insurance coverage among MA residents has increased from 94% to 98%.

The MHRS study design consists of 1 “pre” measurement, or the survey fielded in 2006 just before reform implementation, and 4 “post” measurements (2007-2010).  This design fails to provide a reliable counterfactual that reveals what would have happened in the absence of the health reform “treatment”.  A slightly better design would have administered survey questions for many years before health reform implementation. But even this design would be considered somewhat weak for causal inference given the presence of other factors that could have happened concurrently with the policy change that could explain outcomes. For instance, the recession could dramatically impact how much medical debt is incurred or not paid off, even with health insurance — especially with the proliferation of high deductible health plans in recent years.

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