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Is It Fair to Reward Medicaid Patients for Receiving Flu Shots?

My son was underperforming at school, and I was gently encouraging him to try harder (if gesticulating like an over caffeinated Italian qualifies as gentle encouragement). He could not understand why I was upset: “Dad, most of my friends are doing drugs and engaging in unprotected sex. You should be rewarding me for being such a good kid.”

“Reward you for not being bad?!?,” I replied incredulously. That made no sense to me. “When you go above and beyond – when you exert exceptional effort to achieve important goals – then we can talk about what reward you have earned.”

The folks running South Carolina’s Medicaid program don’t appear to agree with my parenting philosophy. A couple years ago, they contracted with a private insurer, the Centene Corporation, to manage its Medicaid population. Part of the company’s approach involved rewarding Medicaid enrollees for receiving recommended preventive care.

This rewards program flips medical payment on its head. Normally, when people go to the family medicine doctor for an annual checkup, they are charged a modest copay for the visit. But through its CentAccount program, the folks at Centene pay patients for receiving such care. You got that right – they aren’t charged for the visit; they are rewarded for it!

When a Medicaid enrollee brings her infant in for a Well Child visit, she receives $10. If she makes all six visits for the year, she will get $25 in that final appointment, adding up to a $75 reward from taxpayers for bringing her child to appointments that the rest of us brought our kids to at our own expense.

In fact, here’s a list of some of the healthcare services CentAccount rewards its customers for receiving:

  • Annual Adult Well Care Visit
  • Well Child Visit
  • Infant Well Child Visits
  • Childhood Immunizations
  • Health Risk Screening
  • Annual Cervical Cancer
  • Annual Breast Cancer Screening
  • Annual Diabetes Screening – HbA1c Tests, Eye Exams, Kidney Screening, and LDL-cholesterol Screening
  • Flu Shot
  • Prenatal Visits
  • Postpartum Visit

At first glance, it might seem obvious that such rewards are unfair. For the same reason it seems wrong to reward my teenager for not doing drugs, why should we reward a parent for vaccinating a child – for doing what any good parent ought to do?

On the other hand, it is also not fair that many Medicaid enrollees are poor enough to qualify for the program despite working full time. It is also not fair that many lose out on their hourly earnings when they take time from work to bring their children to pediatricians.

(To read the rest of this article, please visit Forbes.)

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Hugs, Tweets, and Physician Reimbursement — A Problem for Pay-For-Performance

According to recent research, a hug a day could keep the doctor away. According to another study, twitter can predict the chance that people will experience heart attacks. A normal blogger would look at these two findings and tell a story about the relationship between stress and health. I’m not normal. I looked at these two studies and came to a different conclusion – that we need to change the way we reimburse physicians.

Want to know how I arrived at that view? Let’s start with a quick look at the two studies.

A research team headed by Sheldon Cohen from the University of Pittsburgh exposed volunteers to Rhinovirus particles and monitored them for signs and symptoms of illness, going as far as weighing their nasal mucus. (Isn’t research fun!) Consistent with previous research, they found that people under psychological stress were more likely to become sick, unless they reported having strong social support in their lives. You see, stress creates a neurohumoral cascade, a series of physiologic reactions in the body that impair the immune system. But social support can buffer the immune system.

Even more interestingly, Cohen discovered that hugs – the likelihood that a volunteer was hugged each day – further buffered people’s immune systems, reducing colds even after accounting for the other kinds of social support people received. Hugs are good medicine!

What does this hugging study have to do with physician pay?

In the old days, health care reimbursement was based primarily on the volume of services medical providers provided. Perform one procedure and receive payment; ten procedures and receive ten payments. Perform one annual exam and you’ll be paid for one annual exam, well… you get it. More recently, payers have tried to shift from such fee-for-service payments to pay-for-performance methods. Two doctors might charge Medicare for conducting annual exams on their patients, but if measures show that one does a better job of making sure her patients receive appropriate preventive measures, she will receive higher payments than the other physician. In this case, Medicare would be relying on process measures of care to adjust payments. In other cases, pay-for-performance is based upon outcome measures. For example, cardiac surgeons might receive different levels of pay at the end of the year depending on the survival rates of their patients who undergo specific procedures, after accounting for the severity of patients’ underlying illnesses before the procedure. It’s these outcome-based pay-for-performance measures that are threatened by hugs and tweets.

(To read the rest of this article, please visit Forbes.)

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5 Ways To Figure Out Whether You Are Being Overtreated For Your Diabetes

Diabetes is a dangerous disease, putting people at risk for heart attack, stroke, kidney failure, blindness, amputation…plenty of serious stuff. Fortunately, pills and injections can reduce blood sugar and thereby reduce the risk of those awful sequels. Unfortunately, doctors sometimes treat blood sugar too aggressively, lowering it beyond the point where it helps avert heart attacks and strokes for patients, in fact to the point where patients could end up suffering life-ending bouts of hypoglycemia–of dangerously low blood sugars.

How do you know if your doctor is treating your blood sugar too aggressively? Here are some possible warning signs.

IMPORTANTLY: These are possible signs of overtreatment for people with type 2 diabetes, the kind that usually starts in adults. But since every patient is different, it is important to recognize that if you think you might be experiencing overtreatment, don’t take my word for it; talk about it with your doctor. That said, here are some possible signs of overtreatment that could suggest you need to talk to your physician.

1. A1C consistently less than 7.

The A1C, as most of you with diabetes know, is a blood test that estimates the average blood sugar reading over the past two or three months. People without diabetes typically have A1C levels of less than 5.7, with pre-diabetic levels ranging from 5.7 to 6.4. That means diabetes starts typically at an A1C level of 6.5. You would think, then, that the goal of diabetes treatments would be to bring people’s sugars down to where they have normal A1Cs. But you would be wrong.

The goal of diabetes treatment is to lower sugar enough to reduce complications of the illness without going so low as to create other problems, like dangerous episodes of hypoglycemia. For that reason, experts generally agree on a goal of getting A1Cs to less than 7.5, while avoiding A1Cs of less than 7. So if your A1C is often less than 7, you should ask your doctor whether it makes sense to back off on your diabetes treatments.

(To read the rest of this article, please visit Forbes.)

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Even College Students Care about Healthcare Price Transparency!

Here is an article from the University of Indiana student newspaper, showing that even young adults in United States realize we have a price transparency problem in the U.S. healthcare system. Very exciting to see how many people care about this topic!

Infections aren’t the only thing to have gone viral around hospitals lately. The peculiarities of hospital billings have likewise spread contagiously through social networks.

A recent Reddit post shows an itemized hospital bill for childbirth. The bill shows the latest bizarre billing phenomenon: a $40 “skin-to-skin” charge for holding one’s newborn after a C-section.

Health care professionals explain the charge accounts for the extra supervision required, given the mother’s post-C-section grogginess.

Such an explanation does not account for related complaints that have arisen over past years. Inflated hospital charges for cotton swabs and examination gloves have turned into a typical tongue-in-cheek commentary on hospital stays.

The Editorial Board thinks $53 charges for gloves are ridiculous but acknowledges that there’s a bit more going on beneath the surface.

The fundamental problem with looking at an itemized bill of health care charges is there’s a difference between charges and payments — a distinction outlined by the American Hospital Association.

A hospital can bill a certain amount for a service, but the charge does not necessarily correspond with the amount that the hospital receives. Insurance companies negotiate payments with hospitals, so the expected payment often differs from the charge detailed on an itemized bill.

What seems like inflation might just reflect the convoluted system of billing and payment, as hospitals try to bill around the complexities of insurance company policies.

Odd billing charges could, in some cases, benefit the patient by making them pay less out of pocket. Insurance companies generally pay a predetermined amount under each defined procedural category or billing code. As such, redistributing some charges under an alternative designation could elicit higher net payments from insurance.

For instance, if a hospital bills an amount under the broad category of childbirth, insurance will only pay out a certain total amount for that given procedure. Insurance also might cover a certain amount for a procedure within the childbirth process — an epidural, for example.

If the charge is distributed between these separate classifications rather than lumped under the blanket designation of childbirth, insurance may pay more of the total cost for the hospital stay.

The billing procedures for hospitals and insurance companies raise ethical questions about disclosure — namely, should the actual costs for procedures be publicly accessible to patients and other insurance companies?

The problem with price transparency is health care is a human right and does not operate under the same free-market frameworks as other industries. Patients need to receive care, regardless of their ability to pay.

As a result, insurance programs for low-income patients, such as Medicare, pay at lower rates than most privatized insurance companies, since even reduced payments help hospitals recuperate otherwise sunk costs.

As Dr. Peter Ubel sums up in an article in the Atlantic, “Whatever we do, we need to stop naïvely assuming that price transparency will function in health care the same way it does in other parts of the economy. What works for toasters won’t necessarily work for MRIs.”

To read the rest of this article, visit the Indiana Daily Student.

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Copay Assistance Controversy Continues

My article with Peter Bach of Memorial Sloan Kettering continues to generate debate. The two of us argues that copay assistance programs from pharmaceutical companies help specific patients in the short run, but make it easier for drug companies to demand high prices for their products.

Here is one take on the topic, spurred on in part by our arguments:

“If you can’t afford your medicine, Astrazeneca may be able to help.”

Millions of U.S. consumers hear and read those words every day in direct-to-consumer (DTC) ads from the London-based pharma and similar verbiage from its cohorts. Copay assistance, discounted pricing and free medications for those who qualify are hallmarks of the biopharma industry’s ubiquitous patient assistance programs (PAPs), which also encompass services such as insurance reimbursement support, counseling, genetic testing, health care classes and certain devices.

PAPs – some created decades ago – were established to provide a safety net for patients with the greatest financial need to ensure they could have access to life-saving medications. That sense of compassion still undergirds the efforts of many programs.

“There is always going to be a need for patient assistance programs because there will always be gaps,” Gary Pelletier, executive director of the Pfizer Patient Assistance Foundation, told BioWorld Today. “We’re never going to have a perfect state where everyone has perfect coverage.”

Even if all patients had optimal prescription drug coverage providing $5 copays on every prescription drug, “some patients will still need help because they might be on multiple medicines, and $5 across multiple medicines can add up,” Pelletier pointed out. “We do have many patients in our program who have very low incomes. Even a $5 copay, if they’re lucky enough to have that, can be too much.”

But in recent years PAPs also have become vehicles for certain bad actors to increase prices and further muddle the enormously complex pricing of drugs across the supply chain. In February, Democratic members of the House of Representatives Committee on Oversight and Government Reform issued a blistering memo alleging that officials at Valeant Pharmaceuticals International Inc. used the company’s PAPs to justify raising prices and to generate higher revenues by driving patients into a closed distribution system. The committee concluded, based on a review of 75,000 pages of internal company documents, that Valeant used its PAPs to divert attention from price increases, especially for drugs it sought to categorize as orphan products.

The committee’s findings were part of a string of revelations about Valeant business practices that led to the ouster of CEO J. Michael Pearson. (See BioWorld Today, March 22, 2016.)


Although the actions of a few have shone a harsh light on PAPs, they’ve also fueled debate over a larger question: Are these programs part of the industry’s drug pricing problem or part of the solution? The concerns have reached beyond the halls of Congress. This month, Annals of Internal Medicine published several commentaries on the topic, with one suggesting that copay assistance – the bedrock of most PAPs – may do more harm than good to the U.S. health care system. Health policy researchers Peter Ubel, of Duke University, and Peter Bach, of Memorial Sloan Kettering Cancer Center, suggested that the PAP hastily introduced by Mylan NV to deflect attention from the soaring price of its Epipen represented “a recipe for higher health care costs in the future.”

The Epipen debacle, which became the subject of water cooler chatter and late night TV talk show monologues for more than a month, was largely responsible for dragging PAPs into the larger controversy surrounding drug pricing. (See BioWorld Today, Aug. 24, 2016, Aug. 26, 2016, and Aug. 30, 2016.)

Ubel and Bach argued that co-pay assistance programs, in general, diminish price pressure, undermine benefit designs that allow for low-cost insurance plans, reduce negotiating leverage for insurers and prevent patients from acting as consumers.

The researchers pointed out that the copay assistance programs that serve as the centerpiece of most PAPs “are not as good as they seem,” maintaining that biopharmas offer such assistance “only for those that patients fill before their insurance kicks in. When patients reach their out-of-pocket maximums, insurers pay all future costs. Because insurers cannot distinguish between payments from patients and copay coupons, the coupons can be used to speed patients to their out-of-pocket maximum even when they have not paid the share their insurance plan requires.”

Ubel and Bach don’t advocate eliminating copay assistance programs altogether because, “if we did away with them, it would hurt patients.” Ubel told BioWorld Today. He added, however, “if we rely on copay assistance, it just drives prices up in the long run.”

PAPs have critics even within the industry. Kalobios Pharmaceuticals Inc. CEO Cameron Durrant, who was the first to issue a responsible pricing model for his company – for now a paper tiger, since Kalobios has no commercial products – said it’s important to step back and consider the reason the industry uses coupons and other discount programs.

“People are feeling the pinch of higher out-of-pocket costs,” he acknowledged, “but why is that? Generally, it’s because of the formulary position of their therapies and the direct relationship to the price of their drugs.”

Durrant questioned whether PAPs benefit the patients who need the most help, maintaining that the programs are structured more to meet commercial sales targets than patient needs, with actual coupon and discount card redemption rates hovering in the single digits.

Coupons and savings cards also represent an extra burden on pharmacies, especially in small communities that are underserved by the national chains, according to the National Community Pharmacists Association (NCPA). Most cards involve billing as secondary insurance, adding to the pharmacy’s work flow. On top of that, the cards often are handed to patients by prescribers without explanation, leaving pharmacists with the responsibility of educating customers about eligibility and usage.

To Durrant, the obvious solution is to move away from discount mechanisms toward pricing models that are fair, transparent and sustainable.

“Patient assistance programs are a sign of the broader malaise around price,” Durrant told BioWorld Today. “They’re an effort to tackle pricing through the back door. If we don’t take this issue on, it’s going to be done to us as an industry through regulation.”

Click here to read the rest of this article.

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Why The Government Tried To Fix Primary Care And Failed

Americans spend more per-capita on medical care than just about any other country and, yet, they often have little to show for it. Americans have worse access to care than people in other countries, and are often less likely to receive primary care services, like preventive therapies and screening tests. Determined to address these problems, Medicare leaders have been testing out new models of primary care, hoping to find win-win situations – reimbursement schemes that improve quality while maintaining or lowering the cost of care.

So far, many of those efforts have failed.

Near the end of 2012, Medicare began giving extra money to almost 500 primary care practices across the US, money the practices used to try to improve the care they offered to their patients. The goal of this Comprehensive Primary Care Initiative was to prod primary care practices to make it easier for patients to: contact providers quickly; coordinate care with other specialists; provide care management to patients with complex chronic illnesses; and better engage with patients and their care givers. The extra Medicare payments were decent sized, almost $60,000 per physician per year. The practices could use this money to hire extra nurse practitioners, or to reimburse those who were working odd hours to give patients more access to care, or other efforts.

Medicare not only gave practices these upfront payments, but also offered to give practices extra money if they reduced overall spending for their Medicare population, an incentive known as shared savings.I am a primary care physician and for around 20 years I worked in VA medical centers, a system that, during my time there, did a great job of coordinating care between primary care physicians and sub-specialists, and of offering care management for patients with complex illnesses.

When I practiced in the VA, I often worked closely with pharmacists and nurse practitioners, for example, to address the need of patients with uncontrolled diabetes. So I am very excited that Medicare is trying to invest in and test ways of improving primary care.

Medicare administrators hoped that better primary care would lead to lower costs. Coordinating care with specialists, for example, should reduce unnecessary testing. Better care management should reduce the need for hospital care.

(To read the rest of the article, please visit Forbes.)

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Copay Assistance – Good For Patients, Bad For Prices

Annals of Internal MedicinePeter Bach and I have an essay in the Annals of Internal Medicine laying out some of the problems with pharmaceutical funded copay assistance programs. Check it out.



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Cancer: A Disease of the Young?!?

If you only paid attention to popular media, you’d think cancers primarily strike young people. Here’s a picture from a medical journal contrasting media coverage of cancer to actual occurrence of cancer in younger and older people:

Cancer A Disease of the Young


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Your Environment is What You Eat

If you eat lots of meat, then you are contributing to global warming. Animals like cows require lots of grain, and they emit lots of methane; therefore, demand for hamburger increases CO2 emissions. Here’s a picture from the Washington Post illustrating how much we can reduce emissions by changing our diets:

Your Environment is What You Eat

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Don’t Let Your Physician Tell You What To Do Without Finding Out Your Goals


A recent study of men with early-stage prostate cancer found no difference in 10-year death rates, regardless of whether their doctors actively monitored the cancers for signs of growth or eradicated the men’s cancers with surgery or radiation.

What does this study mean for patients? Based on research we have conducted on prostate cancer decision-making, the implications are clear: Patients need to find physicians who will interact with them the way a good financial counselor would, taking the time to understand them well enough to help them find the treatment that fits their goals.

Imagine a couple in their 40s who ask a financial counselor for advice on retirement planning, and the counselor tells them how much to invest in domestic and foreign stocks versus bonds versus real estate without asking them about their goals. A good counselor would find out what ages the couple wishes to retire at, what kind of retirement income they hope to live off of, how much risk they are willing to take to achieve their goals, and how devastated they would be if their high return investments go south, forcing them to delay retirement or reduce their retirement spending.

Far too often in medical care, physicians don’t behave like good financial counselors–they give treatment recommendations without taking the time to understand their patients’ goals. Consider early-stage prostate cancer, a typically slow-growing tumor that is not fatal for the vast majority of patients who receive the diagnosis. In some men, the tumor lies indolent for decades.

For that reason, men sometimes choose to monitor their cancers–have their doctors conduct regular blood tests or biopsies to see if the tumor is beginning to spread. Such monitoring has the advantage of being relatively noninvasive, but it can create anxiety for patients who wonder, every six months, whether their next checkup will bring bad news.

For that reason, some men prefer active treatments like surgery or radiation that eradicate their cancers and therefore reduce cancer-related anxiety. But these more active treatments have their own downsides–each treatment is relatively arduous, and they can cause both erectile dysfunction and urinary incontinence.

The choice between active treatment and active monitoring depends on a patient’s goals–on how they view the trade-off between outcomes like cancer-related anxiety and erectile dysfunction. When counseling patients with early-stage prostate cancer, physicians need to help patients focus on these trade-offs.

(To read the rest of this article, please visit Forbes.)


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