The Health Care Blog

BEST OF: Interview with Shawn Jenkins, CEO BenefitFocus

When I was contacted by the PR folks representing BenefitFocus I found out that they'd quietly put into place the original 1995 business plan of Healtheon--connecting employers and health plans electronically around enrollment and billing. (Remember The New New Thing?) Ironically enough some of the plans that announced that Healtheon was going to do that with them in 1996 are just getting online with BenefitFocus now! So I thought that it would be pretty interesting to talk with Shawn Jenkins, BenefitFocus' CEO about their core business, which has been growing like crazy in the last couple of years.

Then I found out that they were also launching a Web2.0 media group including a new health care YouTube-type video site called ICYou (get it?), hiring a star local news anchor from Charleston SC, Nina Sossaman-Pogue, and creating a PHR, and that they also wanted to come sponsor and video the Health2.0 Conference. So then I really wanted to talk with Shawn!

Here's the interview. (We had a slight technical hitch in the middle but I think my editing skills have overcome it!).

FRIDAY FUNNY: Big Pharma Outsources all "Bad Stuff" to Sri Lanka

Or at least that’s what Steve Woodruff at Impactiviti blog thinks it’s doing!

POLICY: The DEA continue their sorry role

In raiding like Gestapo officers and then shutting down all the medical marijuana dispensaries in San Mateo county Thursday, the DEA confirmed the sensible opinion that it’s ana gency filled with total scumbags. I guess we can blame the cowardly Democrats who did not vote to suspend DEA raids on medical marijuana dispensaries even when they had the chance to do so last month.

But what’s worse is that for the first time that I can recall local law enforcement in California joined in, with both the City of San Mateo PD and the San Mateo County Narcotics Task Force taking part. That’s just shameful behavior from those local cops, presumably incited by the DEA offering them a share of the take—as usually happens in these situations. Are they unaware of the local support for Proposition 215 and medical marijuana?

Clearly we need Federal resolution of this ridiculous waste of taxpayers money, and the consequent suffering of patients—but the local cops need to get a clue first. I sincerely hope that the citya nd county elected officials let them know about this.

HEALTH 2.0 UPDATE

We're pleased to announce a number of new additions to the roster of speakers at Health 2.0. First, we welcome Dr. David Brailer, formerly the Bush administration's National Coordinator for Healthcare Information Technology and now the head of Health Evolution Partners. David has been busy since leaving Washington. For background, see this piece in the New York Times. Take a look at the Health Evolution Partners site for a bit more about his investment focus. David will be adding his special perspective to the Consumer Aggregators panel. He'll be joining Google's Adam Bosworth, WebMD's Ann Mond Johnson, Microsoft's Peter Neupert and Yahoo's Bonnie Becker, along with moderator and  friend of THCB Jane Sarasohn-Kahn.

UPDATES: The votes are pouring in the contest to nominate the final speaker for our social media for patients panel. If you haven't had a look yet, we have a very interesting collection of nominees. Note: To prevent potential fraud our system tracks the IP address of every submission. Unfortunately, for some corporate networks this can cause problems. If you'd like to vote and have been unable to please email info@health2con.com.

APPLAUSE FOR:  Health 2.0's latest charter sponsors - Healthline and Destination Rx. Welcome guys!

ADDITIONAL UPDATES: Interested in exhibiting at Health 2.0? A limited number of tables are still available for sponsors. Contact  john@health2con.com for pricing and other details.

You can also go over and have a look at the latest version of the Health 2.0 agenda here.

We're equally pleased to announce that we'll be joined by Dr. David Kibbe, current head of the Center for Health Information Technology at the American Academy of Family Physicians. David will be speaking on our closing reactor panel "Health 2.0 -- Looking Ahead."

In another big move, we'll be adding Health Hero Network founder Steve Brown to the mix. Steve is currently entrepreneur in residence at Mohr Davidow Ventures. Steve will be joining David on the closing reactor panel.

If you're planning on attending Health 2.0 there are still spots open, although they look to be going much faster than expected. A sell out, once an idea that lived in the realm of fantasy in our active little imaginations at Health 2.0, is looking like a distinct reality. (Both wonderful and a bit frightening at the same time!!) So if you want to be sure to get in the door, it probably makes sense to go ahead and reserve your spot now.

Meanwhile, a few people have had problems with our decidedly Web 1.0 sign up form, for mysterious technical reasons having to do with fluctuations in Internet traffic and their web browsers. (Memo to self:
what would a Web 2.0 sign up form look like? Would you be able to chat with us while you sign up? See a list of enrolled registrants?  Hmm... an interesting design question, that.) If you do run into trouble, or
find forms confusing, just email us. Our crack tech support team will dutifully sign you up and provide counseling.

Meanwhile, we'll be determining the last speaker for the Social Media for Patients panel over the next ten days in a symbolically interactive way. Starting tomorrow, you'll be able to cast your vote for the company/speaker that you'd like to hear from. You'll get to pick from a talented pool of twelve companies involved in the field in one way or another. Stop by in the next few days to cast your vote.

PHARMA: Why Stretch? by Maggie Mahar

Why does the pharmaceutical industry pour billions into direct-to-consumer (DTC) ads? One explanation is that drugmakers need a way to market new products that they are having a hard time selling to doctors—at least this is what one medical ethicist suggests in the May 2007 issue of The Oncologist.

Noting that more and more pharmaceutical companies are peddling their products directly to cancer patients, he writes:

"I have a hypothesis about which types of oncology drugs are most likely to be advertised directly to the consumer. I think they are less likely to be those drugs that have been proven to have benefits, have no competitors, or are known to be cost-effective. There would be no reason to promote them, as they are going to be used anyway. In contrast, it's those drugs in competitive markets, at the margins of evidence-based medicine, where pressure from patients resulting from direct-to-consumer advertising might lead to more prescribing. I suspect that these marginal drugs will be the very ones that are advertised most, which is worrisome."

A recent report in The New England Journal of Medicine confirms that drugmakers tend to promote their newest drugs DTC: “Notably, nearly all (17 of 20) advertising campaigns for the most heavily advertised drugs began within a year after FDA approval of the drug. . . .which raises questions about the extent to which advertising increases the use of drugs with unknown safety profiles.”

In other words drugmakers are going directly to the consumer at a time when their products are, indeed “at the margins of evidence-based medicine.” Experience with drugs like Vioxx has taught many doctors to take a wait-and-see attitude toward remedies that have not yet been widely used by the general population. . Unless the “new, new thing” is likely to save lives, many prefer to wait until more evidence has come in about risks versus benefits before turning their patients into guinea pigs.

Meanwhile, the NEJM reports, drugmakers have stepped up their campaign to market their wares to laymen. From 1996 to 2005 spending on DTC promotions has grown more than three-fold, spiraling from $985 million to $4.237 billion.

Who picks up the tab? As always, when it comes to healthcare spending, the answer is: “you and I.”  Which leads me to wonder---how much value are we getting for these ad dollars? Do DTC ads actually perform an educational service, as the industry claims,, alerting us to diseases that we don’t know we have while apprising us of cures that our doctors may not be aware of?

Pondering these questions, I can’t help but think of Mirapex, a drug originally developed as a treatment for Parkinson's until its manufacturer decided to market it to a second, potentially much larger audience: folks with twitchy legs, a.k.a. Restless Leg Syndrome (RLS) . Probably you’ve seen the animated spot on television featuring a very cute pair of curvy legs painted in the Mirapex logo colors, orange and green, tossing and turning in bed. The music is catchy. At the end of the ad, after touting the benefits of Mirapex, a voice-over warns about possible side effects: “dizziness, nausea and sweating.”

Okay, this sounds like the risks involved in taking many medications.  But then the voice  mentions something about consulting your doctor if you experience “gambling, sexual or other intense urges . . .”

A little Googling turns up an explanation. It seems that a 2005 Mayo Clinic study revealed that some patients taking Mirapex or similar drugs have become compulsive gamblers.  No surprise, you can find full details on websites like www.lawyers.com Patients who have lost tens of thousands playing slot machines have begun suing the drug’s manufacturer, Connecticut-based Boehringer-Ingelheim Pharmaceuticals. (The company says there is no evidence that Mirapex causes the problem.) )http://72.14.205.104/search?q=cache:ckAiigp3V2MJ:health.dailynewscentral.com/content/view/0001262/62/+Mirapex+and+lawsuit+and+gambling+and+2007&hl=en&ct=clnk&cd=10&gl=us.

Finally, the voice-over issues one more warning: “Mirapex may cause you to fall asleep without any warning, even while doing normal daily activities such as driving. When taking MIRAPEX hallucinations may occur  . . . You should talk with your doctor if you experience these problems.”

Assuming you survive the car accident.

At this point, the risks do seem to be piling up. One can see how it might be hard to pitch this drug to doctors—especially doctors who are shy about meeting lawyers.

On the other hand, the ad is both entertaining and memorable. The production values are high—it’s  likely to catch the eye of many consumers. Moreover, if you go to the Mirapex website and click on “Identify Symptoms”  you’ll begin to realize just how many of us may be suffering from RLS—without even knowing it.

“You may have restless leg syndrome, the site explains, if you answer yes to these four questions:

1. Do you feel a strong desire to move your legs from time to time, often when they make you uncomfortable?  

2. Do these sensations in your legs occur or get stronger when you are inactive?

3. Does moving around or stretching help ease these uncomfortable sensations in your legs?  

4. Do these uncomfortable sensations feel their worst at night?

I answered “yes” to all four questions—which suggests that Mirapex may be just what I have been looking for. After all, I spend hours, every day chained to  my computer. I read. I write. My knees lock.

Why should I give in to that “strong desire to move my legs from time to time” if I can sit still and take a pill? Why “stretch to ease those uncomfortable sensations in my legs?” if Mirapex can relieve my symptoms, and solve my problems. As the ad says: “When your legs feel better, you feel better.”

Little wonder the FDA approved Mirapex for RLS in 2006. That year, world-wide sales jumped by 23.4 % to 536 million Euros.

And that was before Boehringer Ingelheim's broke out its print, online and broadcast campaign in July of 2007. (The company isn’t telling how much it’s spending.)

If you are interested in hearing more about the hazards of direct-to-consumer advertising, government policy on DTC ads, and why Merck’s ad campaign for its cervical cancer vaccine is making health officials in other countries uneasy--- I’ve written about these issues on my new blog. Please return here to comment.

POLICY: Guesses at important dates...

In the comments to Brian Klepper’s piece yesterday, troublemaker commenter JD asks the following

Matt, I don't know if you can do polls on this site, but I'd be interested to see what the readers here would guess as the date universal healthcare legislation passes. My own guess is that SCHIP expansion happens in 2009 (if not sooner), and effectively universal coverage is passed in 2011, effective in 2012. And my guess is that it is more like the Massachusetts model, actually, than Medicare-for-all. Idle wonkery, to be sure, but enjoyable idle wonkery.

I can’t easily put up a poll without pulling John off some real work, but you can all give your best guesses below. How about these three questions.

1) When will SCHIP pass?

2) When will comprehensive health care reform pass the Congress and get signed by the President?

3) When will we get to what reasonable people would agree was 100% universal coverage?

Have fun!

POLICY: Health Care Reform Now? Don't Hold Your Breath

While Brian goes into the details of what's need for reform, it just so happens that a few weeks back I wrote an op-ed for the LA Times suggesting that the current "crisis" wasn't bad enough. As (after soliciting the darn thing) they didn't print it, I thought it was time to give it an airing and I've put up a version of it as my Spot-on piece for this week. It's called Health Care Now? Don't Hold Your Breath.

Judging by the number of articles about corporations, unions and politicians decrying America's healthcare system, you could be excused for believing that we will have health care reform very soon. You'd be wrong. More

Reform's Tougher Problem by Brian Klepper

Yesterday, Matthew gracefully pointed to my post over at Bob Laszewski's Health Care Policy and Marketplace Review, which I called "The Tougher Health Care Problem." Bob's readership leans heavily toward the DC-based health care policy types who may not follow the happenings over here. The policy crowd is a slightly different but very important audience that I hoped might be receptive to a different message than they are typically pitched.

Reform is a complicated topic, particularly because the discussion tends to be so narrowly defined around its objectives: access, quality and cost. But an equally important issue is that American health care is fundamentally about power and money. Achieving reform requires a real understanding of the power dynamics involved.

For a lot of reasons, I've come to believe that there's little point in trying to get (most) health care organizations to collaborate on reforms. While I know its very un-PC, and while I understand that every "advocacy" group believes it has a right to be at the table, the table is current dominated by these groups and, you may have noticed, we're not making much progress toward reform. The major players make little noises about change, but mostly they've retreated into silos where they're trying to figure out how to get as large a piece as possible of the diminishing pie, and get control over the reform process.

Yes, in yesterday's article I argued that cost is as important an issue to address as access. But here are a few deeper points that I also wanted to get out there for discussion.

You'll note that I keep using the term "meaningful" reform. This is shorthand for measures that can drive down cost, improve quality and broaden access. Half-measures - like giving tax credits to people who can't afford to lay out the money for health care or coverage in the first place - don't count.

1) With few exceptions, we shouldn't hold our breath for the leaders of the health care industry to help drive meaningful reform.

We know that as much as half or more of all health care cost is unnecessary, inappropriate or waste. If reforms involve eliminating some portion of that waste and the revenues they represent, the industry will be against it. Nobody willingly gives up money. This is why the drives to interoperability, evidence-based standards, pricing/performance transparency, and performance-based reimbursement have taken so long.

2) Getting meaningful reform will require that Congress sign off on it. There are only two ways for that to happen. One is that Congress must somehow become resistant to the health care industry's lobbying efforts. (Somehow this doesn't seem very likely to me.) Or the non-health care business community must determine that health care reform is in its interests, find a way to galvanize and mobilize on change, and exert greater influence than the health care industry on this issue.

Policy change must occur in Congress, which has demonstrated time and again (e.g., Medicare D) that it is most receptive to special interest influence. As the largest single economic sector - one dollar in every seven and one job in every eleven in the US economy - health care constitutes about 16 percent of all the lobbying dollars spent on Congress. In 2006, this was about $350 million of $2.5 billion in total lobbying dollars from all sectors, according to Open Secrets. Without question, health care is the most influential and powerful lobby.

3) The leaders of non-health care business have two big reasons to want meaningful health care reform. One is that they're between a rock and a hard place on coverage. If their employees lose coverage, productivity plummets. If they keep it in its present form, employer costs will continue to explode at multiples of general inflation, workers earnings and business income growth. (This is why so many large employers are installing worksite clinics, but that's another post.) The other is that if the health care economy, as the larger economy's largest component, descends into turmoil, the turbulence will likely cascade to and disrupt every other economic sector. In other words, it is in business' interests to back reform because the current situation will ultimately threaten the national economic security.

America's non-health care business leaders are aware that, to a large degree, they're being held hostage by a health care industry resistant to adopting tools and processes for streamlining (e.g., lean techniques) that other industries installed long ago. Medicine is still a cottage industry, there is still almost no transparency, there is still more discussion about than action on quality, and most of the industry is still hugely profitable.

4) The most promising scenario for meaningful reform would be for non-health care business leaders to come together around a set of structural (not ideological) change principles, jump start a larger effort that recruits the support of the whole of American business, and exerts its overwhelming influence on Congress for real change. This is where the power in America lies, and health care is now a case where the public interest intersects with the special interest.

The real question is whether the leadership currently exists within American business to drive an effort that is in the common interest rather than the special interest.

Finally, there are important changes afoot in market-based reform. The Health 2.0 meeting will present discussions of the potential inherent in a market-based paradigm shift, but one in which many of the important players are NOT the usual suspects. They are from outside health care.

There are other examples in the works. I mentioned worksite clinics. The drive toward MUCH larger physician practices; clinical, patient and purchaser decision support tools; refinement of chronic disease management; performance-based reimbursement methods; and on and on.

The increasing dysfunction of our current system will make all these and other approaches more workable. But markets still must work in the context of policy. American health policy is in desperate need of reform. But the health industry is conflicted and won't drive what's needed. That impetus must come from outside.

POLICY: Nanotechnology and the Regulation of New Technologies by Bart Mongoven

Bart Mongoven is a senior analyst with Austin based strategic intelligence consultancy  Stratfor.com, where he tracks public policy. This piece first appeared in the Stratfor Public Policy Intelligence Report. If you find his analysis interesting, you may want to take a look at his earlier analysis of the issues facing California Gov. Arnold Schwarzenegger's health reform plan. You also may want to consider signing up for their free email reports, which I find very useful and well-informed.  -- John 

Researchers from the Woods Hole Oceanographic Institution and Massachusetts Institute of Technology on Aug. 16 released a study stating that the production of carbon nanotubes gives rise to the creation of a slew of dangerous chemicals known as polycyclic aromatic hydrocarbons, including some that are toxic. Discussion of a new regulatory regime for nanotechnology has been ongoing among think tanks, advocacy groups and industry for years, and findings that suggest the sector could generate public health risks will add to the growing pressure on regulators or legislators to decide how to regulate it.

The debate over the regulation of nanotechnology has taken place on two levels. The first is over the public health risks nanotechnology poses and ways to determine and measure those risks. This is mainly the familiar risk-assessment process applied to the products of a technology that acts slightly differently than previous technologies do. At the center of a second debate over public policies governing nanotechnology is an older, more contentious issue: the politicization of science and technology.

At issue is the point at which government is justified in stepping into the realm of science to stop or slow scientific research, regardless of whether harm has been done. This concern lay at the center of the early debate over biotechnology, and also played a role in the debate over federal funding of stem cells and bans on human cloning.

A number of efforts are currently under way to determine the answers to the first question. The most impressive of these efforts are occurring in a number of partnerships between corporations and advocacy groups or think tanks. By contrast, the debate over the second question is largely being ignored. Where it is taking place, the discussion is occurring by implication.

What ultimately happens with the risk-centered regulatory debate will impact this larger philosophical debate, and will be crucial to the rules governing the coming wave of new technologies. This new wave will include even more controversial issues, including human cloning and synthetic forms of life. These issues will challenge the public to accommodate technological progress in their world views.

Nanotechnology

Nanotechnology was defined by one of its founders, Nobel Prize winner Rick Smalley, as "the art and the science of building stuff that does stuff on a nanometer scale." Essentially, nanotechnology is the manipulation of atoms and small molecules at a level that is slightly different from chemistry. While nanoparticles generally behave like traditional chemicals do, in some cases they can be very different. In these slight differences lies the technology's promise -- namely, what is possible through chemistry has been studied for centuries, while nanotechnology mostly remains an open field. Still, as one observer has put it, to say that we should regulate nanotechnology is the equivalent of saying we should regulate a hammer -- nanotechnology is a tool, and its creations will emerge as the subject of regulatory debate.

Nanotechnology is currently used in commercial applications, most famously sunscreens and stain-resistant pants. The next five years will see a boom in the use of nanotechnology in applications ranging from greatly improved batteries to stronger, lighter materials to improved military weapons. At the base of nanotechnology are some prevalent building blocks, most importantly carbon nanotubes, fullerenes and buckminsterfullerenes or "buckyballs." (Fullerenes and buckyballs were named after Buckminster Fuller, considered the godfather of nanotechnology, because their shape is similar to his geodesic dome.)

The major players in nanotechnology include all of the large research-based chemistry companies, including DuPont, Dow Chemical Co., Corning Inc., General Electric Co. and a number of smaller research companies that cluster around universities in the Northeastern United States. The way these companies currently use nanotechnology has given rise to the first set of regulatory concerns surrounding nanotech. The questions raised by this use will be answered by rules regarding what these manufacturers must guard against in production, use and disposal of nanotechnologies. In June, DuPont and the environmental group Environmental Defense provided a preview of the likely framework for nanotechnology regulation.

Most of the larger corporate players view nanotechnology as an important addition to a new generation of chemistry and to biotechnology. It is in the combination of chemistry, biotechnology, electronics and nanotechnology -- specifically the combining of nanoscale devices with specially engineered living organisms -- that a real revolution in materials, devices and medicine lies. It is also here that the controversy surrounding nanotechnology is strongest, as it raises questions about the foreseeablity of risks and the desirability of certain technological advances.

When to Regulate?

Modern chemistry is regulated in industrialized countries by a process known as risk assessment, which is a complex scientific assessment that determines whether the potential risks posed to health and the environment of a certain chemical outweighs its value in commerce. In the United States, chemicals are regulated by the 1976 Toxic Substances Control Act (TSCA). In Europe, they are regulated by a new process known as the Registration, Evaluation and Authorization of Chemicals (REACH).

As the framework created by Environmental Defense and DuPont shows, nanotechnology probably can piggyback on chemical regulation, but it will require a slightly different set of standards than chemical regulations do. Important differences include measuring exposure and dose-response relationships. For example, Andrew Maynard of the Woodrow Wilson International Center for Scholars points out that for some nanoscale materials, such as titanium dioxide, toxicity is based on the surface area to which sensitive tissue -- lung tissue in the case of titanium dioxide -- is exposed, rather than simply the mass of the material. The dose still makes the poison, but the dose needs to be measured differently than in traditional chemistry. In addition, the current regulatory framework needs additional tools to anticipate harm, a controversial but largely successful element of chemical regulation far more difficult to apply in the new field of nanotechnology.

These regulatory questions have come at an interesting point. The European Union is only now beginning to implement REACH, and its coming into force has triggered changes in the marketplace and accelerated efforts to change U.S. chemical regulation. For some in the United States, the imminent commercial boom in nanotechnology calls for the widening of TSCA to cover nanotechnology.

Many see REACH as more protective of public health and the environment than TSCA. As such, there is a growing movement in the United States for the adoption of REACH-like chemical regulations. For those calling for a complete reassessment of TSCA, the revolution in nanotechnology has come at the right time. They argue that TSCA cannot cope with the challenges of nanotechnology, so therefore the law should be revamped to prepare for the next wave of technology. A number of states are currently considering their own REACH-like laws, and the "opening" of TSCA (Capitol Hill-speak for rewriting the law) seems increasingly likely in the coming years.

Politics and Technology

Ultimately, REACH and REACH-like laws deal only with the risks posed by the substance. They do not address the moral or social questions relating to whether society wants certain technologies to advance, or even whether the government has a right to stop the development of new technologies.

In the Western conception -- strongest in the United States -- individuals, groups and companies are allowed to do whatever they want until or unless that activity is proven harmful to others. Attendant social, cultural or economic changes have seldom been allowed to stand as a reason not to allow a technology. The classic example is the fate of the buggy whip manufacturer of the early 20th century driven out of business by the advent of the automobile. The manufacturers certainly experienced economic losses, but this cost was accepted as the price of technological advance. Similarly, the manufacturers of black-and-white televisions, vacuum tube amplifiers and film all have seen their businesses decimated by technological advances.

Still, the introduction of biotechnology to Europe sparked a protectionist reaction. The food that has been served to millions of Americans daily without incident was made, and largely remains, illegal for European consumers. Europeans have justified their bans on biotechnology using various scientific and ecological arguments, but with a few exceptions, their assertions are considered scientifically tenuous. This is not to say justifiable reasons for Europe to ban genetically modified organisms (GMOs) do not exist, just that the reasons the European Union has given for bolstering their laws are flimsy by almost any scientific account.

Instead, Europe approached biotechnology by banning products on social and cultural grounds. To do this, they appealed to the precautionary principle, which more or less states that in the presence of fear but the absence of hard data, a product should be proven not to be harmful before being allowed on the market. With the act of proving a negative still being impossible, when the principle is used in a regulatory context, it becomes a tool to ban a product or activity without proof that the thing is actually dangerous -- a clear reversal of the traditional process of letting people and companies do what they want to do as long as it harms no one.

The European Union saw biotechnology as bringing change to the economics of farming, reducing the margins for farmers, encouraging larger, corporate-owned farms and placing multinational seed companies that double as chemical companies in a powerful position on the farm. Such a shift was unacceptable to many EU countries, especially France. Making matters worse, the biotechnology companies argued that their products were materially no different than traditional products and should not be labeled as being different in any way. To Europeans (and also to the Japanese), bringing technology to food is suspicious to begin with. And saying it should not be labeled is akin to demanding the ability to foist a technology in a very personal place -- food -- on a helpless public. The EU bans on GMOs came for these reasons.

Products and Morality

World Trade Organization (WTO) rules contain prohibitions against the use of safety or health regulations as barriers to free trade. Under WTO rules, to avoid claims that product bans or prohibitions are protectionist, countries' regulations (or those of groupings like the EU) must reflect the standards set by the International Organization for Standardization (for products) or Codex Alimentarius (for food). Stricter standards can be judged to be trade barriers rather than legitimate protective regulations. While fighting in venues like WTO and Codex on behalf of the precautionary principle -- arguing that it is only sane to look before you leap and better to be safe than sorry -- the European Union has been forced to develop scientific arguments that meet the WTO's requirements. These have failed generally, and the union is under sanction for these regulations.

Nanotechnology (along with the coming combination of nanotech with other new technologies) has the potential to bring the precautionary principle back in a new, more coherent form. This would be marked by the public, regulators and legislators arguing over whether advances in science and technology should be political, rather than scientific.

American business expresses exasperation at the European Union's use of the precautionary principle, the bans on GMOs, hormone-fed beef and certain other products, and other such issues. At the same time, the United States has a number of regulations and policies applying the brakes to technology that do not solely rely on risk assessment and the assertion that the individual or corporate behavior is risky to others. The ban on human cloning and the federal government's decision not to fund stem cell research are examples of U.S. government decisions that certain technology is not desirable, regardless of the long-term potential benefit to society and assertions that by law these practices do no harm and therefore should be legal.

Nanotechnology in most applications does not rise to the level of controversy associated with human cloning or even stem cell research, but in some envisioned applications it does raise serious moral questions, especially when tied to emerging biotechnologies. Among the most intriguing of these is the development of synthetic life. A recent patent application was submitted for an organism composed of cells whose genetic makeup has been limited only to the genes necessary to maintain life. These synthetic organisms, combined with nanotechnologies that can provide structure and even potentially movement, create essentially programmable living things. The applications for medicine, remediation and manufacturing are legion. The moral questions to some are just as vast. In an attempt to raise concerns, one activist group has nicknamed the patented synthetic organism "Synthia."

Stopping Synthia's creation could prove difficult. Its creation, life and disposal will not hurt anyone. Like Dolly and the dozens of cloned animals that came after, it is not human. Those who want to stop Synthia's creators can argue they do not want this technology to advance, but in the strictest regulatory sense, what is happening is legal. Still, there probably will be potent debates in Washington, Brussels and other capitals over the limits society wants placed on biotechnology and nanotechnology, and politics will be playing a role in the future of technology. The question facing nanotechnology's champions -- both in the short term and in the long term -- will be whether they want to press this to a crisis and force regulators to draw a line defining where politics does and does not have a place in technology, or whether they want to stay clear of that line for as long as possible.

Copyright 2007 Strategic Forecasting Inc. All rights reserved.

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About Stratfor
Stratfor is a private intelligence company delivering in-depth analysis, assessments and forecasts on global geopolitical, economic, security and public policy issues. A variety of subscription-based access, free intelligence reports and confidential consulting are available for individuals and corporations. 

HEALTH PLANS: Who said this? No, really

But if you take five people who didn’t get coverage through their employer or were self-employed and you ask them, ‘What’s the No. 1 thing that keeps you awake at night?’ I think a large percentage would say health care. What we’re trying to do is create a better environment for the consumer, the provider and the payer. To all work together.

One very scummy company is launching a PR offensive. I'm sure there are plenty of people who've bought HealthMarket’s quasi-fraudulent products who aren't sleeping too well at night.

POLICY: Klepper, moonlighting again!

Just when we thought we had him pinned down, Brian is moonlighting over at Bob L’s blog. His piece is called Solving the Access Problem Isn't Enough If We Don't Deal With Costs. Not absolutely true in my view. I think you need to do access first then deal with costs. He thinks you need to do them both together. But we’re both sensible enough to think that they’re both problems, and plenty of people—whether at Cato or at Harvard—disagree.

Another Step Toward Transparency -- Brian Klepper

It was the great economist Adam Smith who said that, for markets to work, they need (among other things) "perfect information." Health care hasn't worked, in large measure, because its markets have had almost no information.

So in what could be a huge step forward for the health care transparency movement, a federal court has ruled that the public interest outweighs concerns about physician privacy, and that, next month, CMS should release to a consumer advocacy group the Medicare data sets for 4 states and the District of Columbia. Here's a snippet from Saturday's Wall Street Journal article (subscription required):

The data at issue include medical-procedure and billing details that physicians send to Medicare to get reimbursed by the federal insurance program for the elderly and disabled. Although collected largely for billing and administrative purposes, the data could be analyzed to see how often a doctor performs a given procedure and even to compare mortality rates among patients of different doctors.

The government has until Sept. 21 to release the data, covering Maryland, Illinois, Washington state, Virginia and Washington D.C., to the nonprofit Consumer's CHECKBOOK/Center for the Study of Services. The group said it will set up a free database on its Web site for public use. It has filed similar public-information requests for Medicare claims data for all 50 states.

It's worth noting that this Administration, which has prided itself on its advocacy for EMRs, transparency, RHIOs and all the rest of it, when it counted, sided with keeping doctor performance secret. When the chips were down, this is how it actually worked.

You can bet that analytical groups all over the country will pounce on this information, profile and post the performance of physicians in these states, and campaign for access to the rest of the data.

Until recently, despite a lot of very worthwhile effort, data that could be used to develop performance information have been scarce. Health plans, who had the largest health care data sets, weren't forthcoming with them. Now they're publishing pricing data, which are somewhat useful, but not as useful as some of the other information embedded in their repositories.

The importance of this case can't be overstated. The release of the Medicare data, if it happens, will go far toward making physician performance data more available and commonplace. This is a major victory for health care reformers, and many thanks go to Consumer's CHECKBOOK, the advocacy group that sued for the data. It's still too early to break open the champagne, of course, because the powers that oppose transparency still have a month to get the decision reversed.

Read the court's opinion here, and CHECKBOOK's press release here. This is just one more brick in the wall, of course. But there's steady progress. It's happening. And everything will eventually change in health care as a result.

PHARMA/QUALITY: Merrill Goozner has dug into "The Most Costly Earmark in S-CHIP"

GoozNews: The Most Costly Earmark in S-CHIP

Increased risk of death. No benefit. Higher costs for taxpayers. The ongoing Epo saga, whose latest chapter is being written on Capitol Hill, is a perfect example of why our health care outcomes are second-rate, while our health care costs are second to none.

This is a great bit of digging from Merrill, and it shows why FFS or in this case, Fee for drugs is just a bad way of paying for medical care. Do read it.

OFF-TOPIC: AC/DC lead singer choice impacting economics

This is very important research. I’m just not sure why.

What Are They Thinking: ONCHIT and RTI - Brian Klepper

I'm sure I don't really get the deeper issues involved here, but sometimes its hard to not have your breath taken away by some people's notion of a good idea. Maybe its because I'm not a true geek, but what I'm about to describe strikes me about the same way I feel as when I see a young adult with multiple facial piercings and hear her/him say "Aren't these great!?"

Modern Healthcare has an interesting piece on a report that was developed by RTI, a contractor to HHS' Office of the National Coordinator for Health Information Technology (ONCHIT). The report urges revising Electronic Medical Records (EMR) standards to make it easier for payers and the feds to access the records and spot  fraud.

Now I'm as big a transparency advocate as the next guy, and I routinely explain to doctors how claims or clinical encounter data can be used to accurately rate their pricing and performance relative to peers within specialty. I believe we should use performance ratings to reward the high performers and to incent the poor ones to do better.

But to really get to the system we need, doctors first have to implement and use EMRs. They're key to making the health system as a whole work better. Fewer than a quarter of physicians currently use them at this point. While there are still some buggy whip advocates out there, a large and growing number of doctors get that. Young physicians take it for granted.

Still, there are a lot of hurdles to installing an EMR system. They're expensive. They force you to change your practice's work flows. Some of the designs aren't all that friendly. They're complicated. And who wants to learn a new system. Heck, I know I'd like what it can do for me, but I haven't gotten up the nerve to tackle iMovie yet on my Mac, and that's about a tenth as complicated as an EMR with embedded practice guidelines.

We KNOW EMRs are a good idea but there are lots of reasons for doctors to say NOT YET. This Administration, to its credit (he said, grudgingly) has gloried in their advocacy for these new technologies, what they can do, and how they can help improve quality and cost. (Remember Newt's line, "Paper Kills?")

So WHY would the guys leading the charge on EMRs announce that one of the really great things to use EMRs for when doctors finally bring them online is to WATCH AND CONTROL THEM MORE EFFECTIVELY.

Dumb, dumb, dumb.

But I'm sure I don't see the big picture here.

Evaluating the Quality of Quality Improvement Claims: The Population Health Impact Institute - Brian Klepper

Thomas Wilson PhD is on a mission that's important to health care. Tom, a respected epidemiologist particularly well-known in disease management circles, founded the Population Health Impact Institute (PHII), a not-for-profit devoted to establishing clear, objective rules to evaluate claims of financial and clinical improvement associated with health management programs.

In an August 16th press release, PHII announced its intention to develop a new accreditation program that

“will focus on the methods behind the claims.  It will be based on the established evaluation principles of transparency and scientific validity successfully used by the PHII since its founding in 2004:

• Transparency of metrics,
• Equivalence of populations,
• Statistical significance of measures,
• Plausibility of hypotheses, and
• Disclosures of potential conflicts-of-interest.”

This isn't a lightweight effort. To oversee the development of their "Quality Evaluation Process” (QEP) standards will be developed by a volunteer panel of national experts, and chaired by former URAC President and CEO Garry Carneal, who oversaw the development of 16 new accreditation programs during his tenure with that quality accreditation organization.

PHII also boasts the participation and support of Sean Sullivan, the CEO of the not-for-profit large employer group, The Institute for Health and Productivity Management. Sean has been an extremely balanced and important voice on health care reform. His group argues that it is in employers' interests to stabilize and improve health care quality and costs, because employees and families with good health care produce are far more productive. The opposite is true as well.

PHII is looking for expert volunteers for its standards panel. Visit the site of this important effort and consider whether you or your organization might have a way to contribute expertise, financial resources or both.

By way of disclosure, I sit on PHII's Steering Committee.

THCB: Matthew's back, and many thanks to Brian Klepper

This is a photo of some of what I've been up to while I was away....and to those of you who asked, yes it was as wonderful as we'd hoped, in an "oh so on the beach in Northern California" way.

While I've been off getting married my friend Brian Klepper has done an amazing job covering a huge variety of topics with insight and humor. Thanks very much to Brian, and I hope that we can keep him contributing to THCB. (He's in lots of demand from other blogs and publications, and a great person to have speak to any group). Brian will also be covering the upcoming Health2.0 conference for THCB (as I'll be a mite busy otherwise).

Finally the team working on Health2.0 has been doing an amazing job while I abandoned them for purely personal (if unavoidable) reasons. So I want to thank Indu, John and Sara for their incredible work. If the conference is half as as successful as our wedding, then it'll be great!

Health Care Wonk Review Is Up - Brian Klepper

Every month, some good soul hosts Health Care Wonk Review, an eclectic gathering of posts from around the expert health care  blogosphere. This month, its Daniel Goldberg at the Medical Humanities Blog, and he's assembled a genuinely superb collection of thoughtful essays. One of the underlying themes of THCB, of course, is the vastness and complexity of health care, and those of us really interested in the diversity of health care issues, dynamics and perspectives will find plenty to feast on here. Go on over and work through the ideas on display.

Benign Neglect and the Nursing Shortage - Brian Klepper

I sit on the Dean's Advisory Councils of the Colleges of Health at two public universities in Florida. Both Colleges are led by extremely capable PhD nurses, and have a variety of programs that train students to be health professionals, including nurses.

A few months ago, I was startled when one of the Deans mentioned that her Nursing program had 500 qualified applicants for 132 student slots. In other words, at a time when the market wants her to gear up, she turns away 3 qualified applicants for each one she accepts. As it turns out, it's a national problem. In 2006, Colleges of Nursing turned away 43,000 qualified applicants.

It's not news that health care institutions face a critical nursing shortage. An April 2006 AHA report estimated that American hospitals currently need 118,000 RNs to fill vacancies. That number is expected to triple by 2020, to 340,000 vacancies.

What is less clear to most of us is exactly why the shortage exists. Most of the facts in this piece were drawn from an excellent presentation by Geraldine Polly Bednash, PhD RN. Dr. Bednash is the Executive Director of the American Association of Colleges of Nursing (AACN). AACN's site has a wealth of data on the problem, and the distinguished members of that association draw a VERY compelling picture of benign neglect of the training process by the sector it serves.

Almost three-quarters of Nursing schools surveyed said the main reason that they can't train enough new nurses is a lack of qualified faculty. When I first heard this, it seemed counter-intuitive. There must be thousands of very seasoned and appropriately trained nurses who would be glad to go into the classroom.

Not so. A July 2005 survey of Colleges of Nursing around the country found that 2/3 of all respondents said they had nursing faculty vacancies and needed to hire additional faculty. Of course they want nurses with PhDs, if possible, but with a range of specializations and the ability to both teach and do research. Even so, between 1992 and 2000, the percentage of Nursing faculty positions occupied by PhDs dropped 19%, from two-thirds to less than half.

Data from 2001 showed it took a PhD nurse almost 21 years on average after receiving her undergraduate degree to get her terminal degree. The average age of full time Nursing faculty in 2001 was 51, and its almost certainly older now. As many a 300 PhD Nursing faculty are expected to retire in the next decade, exacerbating the problem.

There are many reasons why Nursing faculty are difficult to come by, but one is overwhelmingly dominant. Nurses qualified to be faculty have to take significant pay cuts for the privilege of taking a teaching position. Nursing schools are unable to pay Nursing faculty candidates what they would make working as nurses in clinical positions in the marketplace. Academic institutions are on tight budgets, especially during times of economic instability, and so cannot compete with the marketplace. Meanwhile, to a large degree, the organizations that employ nurses - typically very affluent entities in the scheme of things - stand by and assume that it is not their responsibility.

Comparison of Nursing Salaries: Instructional and Non-Academic Positions

American Association of Colleges of Nursing, White Paper of Faculty Shortages

On average, each Nursing faculty position produces about 10 new nurses per year, a pretty impressive production figure. As jobs go, nurses are well paid, and with so many other American jobs on the decline, one would think that nursing would look like a great future to many students.

What is needed is for hospitals and other health care organizations to collaborate with universities to subsidize nursing faculty salaries so the bottleneck is eliminated, and so we can prepare for the deluge of need coming down the pike. A failure to do this would be irresponsible. The leadership on this issue must come from the tops of health care organizations within each community around the country.

This one is easily solvable. There is no excuse for not having enough nurses, who are among our best, most capable and most caring professionals.

HHS Secretary Leavitt's New Blog - Brian Klepper

HHS Secretary Mike Leavitt has a new blog.

While its hard to know what information the posts will contain once he settles in, it can only be a good thing for a public official to lay out his thoughts in such an open format. HHS and CMS lie at the heart of much of health care change now, so the establishment of a venue for exchange is extremely progressive and valuable.

Kudos to Mr. Leavitt for going down this path. We'll be reading with interest.

Not Paying For Preventable Errors: A Big Step - Brian Klepper

Fee-For-Service (FFS) reimbursement has been disastrous for the American health care system because, instead of encouraging the delivery of the RIGHT products and services, it simply encourages MORE, and independent of quality and safety.  The system lacks transparency, so we haven't been able to distinguish appropriateness from inappropriateness. As a result we pay for everything, rewarding excess. The industry has seized on this and cultivated excess as a core value. It's a big part of why we're in the fix we're in today.

But FFS' other insidious impact is that it has enabled  - and I mean this in the clinical sense - doctors and hospitals to engage in behaviors fundamentally counter to their patients' interests as well as their own. FFS has allowed physicians to remain in small practices where they lacked the scale to invest in information technology tools, group purchasing or offshore medical malpractice arrangements. As a result, care in the little practices that currently dominate the medical landscape is often more expensive and of lower quality than is typical in larger practices.

In the same way, hospitals have been paid for their services without regard to their quality or safety performance, which has fostered a much laxer attitude toward improving care than if they were rewarded for high performance and penalized for poor outcomes.

For example, current Medicare rules sometimes require higher payment if a complication develops as a result of poor care. A surgical infection or pneumonia that develops while a patient is on a ventilator can lead to increased payments, because a DRG with complications is paid more than one without complications. Of course, this approach is counter to rewarding hospitals for investing in quality and reducing the frequency of adverse events.

In a major step last week, CMS threw down a gauntlet by announcing that, beginning next year October, it will no longer reimburse hospitals for preventable medical errors. In an article in the Newark Star Ledger, Tom Valuck, a CMS physician and administrator, explained "We are transforming Medicare from a passive payer simply processing claims to an active purchaser with a stake in quality and efficiency." Big news indeed.

A little more than a year from now, Medicare will no longer pay for the care and costs required to recover from mistakes that clearly are the hospital's fault: e.g., hospital-acquired infections (particularly those associated with catheters and intravenous lines), bedsores, objects inadvertently left in the body during surgery, transfusing patients with the wrong blood types, or falls in the hospital. Suddenly, hospitals have a financial incentive to make sure that these problems don't happen.

It's important to note that this change in attitude didn't just happen; it has been in the works for several years. (A great background document on this problem is MedPac's Report to the Congress: Promoting Greater Efficiency in Medicare, released in June.) Congress included a provision in the Deficit Reduction Act of 2005 that requires CMS, by October 2007, to identify at least two preventable hospital-acquired complications that are either high cost or high volume. The rule changes announced last week include a requirement that hospitals provide an indication of whether a complication is acquired in the hospital or present on admission. MedPac made this recommendation in it March 2005 report to Congress.

A related issue, "never events," include serious reportable events that have been identified by the National Quality Forum. The Leapfrog Group has recommended to Congress that Medicare require hospitals to report these events and that hospitals be precluded from billing for them.

Suddenly refusing to pay hospitals for preventable errors probably won't save enormous sums in the scheme of things. But the impacts of the action will reach much farther than the action itself. With Medicare taking the lead, commercial health plans undoubtedly will follow very quickly, and that will produce a large multiplier effect.

But most importantly, this decision acknowledges that many hospitals have already taken quality management steps that have significantly driven down their preventable error rates. It IS doable. By creating serious financial incentives - rewards for high performers and penalties for poor performers - for quality improvements in Medicare's payment redesign, CMS has taken a big and important step that will likely encourage not just leading hospitals, but those in the rank-and-file, to begin focusing on quality and safety in ways that most have not until now.

And that can only be good news for patients.

OMNI: The Oncology Metrics National Index - Brian Klepper

An innovative Ft. Worth consulting firm comprised of experienced oncology professionals, Oncology Metrics, has linked private oncology practices throughout the country in a collaborative, knowledge-sharing enterprise, called the Oncology Circle. The first round of information brought together 22 practices containing 167 medical oncologists. Combined, the practices treated almost 63,000 patients annually, had $600 million in revenues and spent $375 million on drugs.

In a separate but related effort, Oncology Metrics has established a new national data aggregation effort, The Oncology Metrics National Index (OMNI), which brings together data from practices using electronic medical records (EMRs), mapping the data in each EMR to a standard template. Then those data are aggregated and mined to produce different cancer care-related clinical measures associated with procedures and processes: e.g., the administration of erythropoietin (anemia drugs), hemoglobin (Hgb) testing, and patient staging. A primary goal is to create a data mine that can allow each practice to see how it compares to others, and how they might improve. But a secondary and also very important objective is the development of transparency information that can help rationalize the practices and costs that have dominated oncology.

This is a leading edge project that leverages the data that is newly available through EMRs, and that is indicative of the kind of progress that we can anticipate throughout health care in the next few years. Clearly a company to watch.

Outrageous by Eric Novack

Outrageous!!

First and foremost—congratulations to Matthew and Amanda on their
wedding!!! Now to the outrage!!!

In Friday’s Boston Globe , health reporter Alice Dembner reports the plight of a 60 year old woman who has to pay twice the amount for health insurance as a 27 year old. “That’s discrimination!!” she says in the article.

Yet MSNBC reports that, “ a typical couple retiring in 2020 will have paid about $100,000 in lifetime Medicare taxes. ‘For that price, this couple is scheduled to receive about $500,000 in lifetime Medicare benefits over and above the premiums it additionally pays in retirement.’

Also, has anyone checked out how much more it costs to get auto insurance
for a 20 year old versus a 60 year old?

Hmmm…

Essential Reading: Laszewski on Rove and Medicare D - Brian Klepper

All of us who have worked in policy during our careers know the old joke that there are two things you never want to see made: sausage and laws. Never was this more true than with Medicare D.

Earlier this week, Robert Laszewski at Health Care Policy and Marketplace Review wrote an eloquent and succinct piece called "Good Riddance to Karl Rove: How Part D Left An $8 Trillion Debt And Got Them Nothing," a genuinely damning indictment of the cynical use of power. Read Mr. Laszewski's posts and you quickly get the fact that he is a keen, unbiased, open-minded, analytical observer of the Washington health care scene. His obvious knowledge about the circumstances and his stature lend terrific weight to his words. I'd urge every person who reads this blog to read Mr. Laszewski's column, and to pass it around to your colleagues.

I was a distant observer of the Medicare D debacle, but close enough to know some of the key players behind the scenes, some of whom have moved onto greener pastures. (Among the most visible and loathsome was Rep Billy Tauzin (R-LA), who helped design and shepherd passage of the bill, and then, on the day he left Congress, assumed the leadership of the Pharmaceutical Research and Manufacturers of America (PhRMA).)

There were big winners all around: the Fortune firms who got a significant part of the largesse in the form of very rich retiree drug benefit subsidies; the drug companies, who got a new subsidized market at very high rates, and the health plans, who instantly had a new, very lucrative product, financed by Congress.

D is a program that is filled with holes, apparently by design, and that encourages outright abuse by less ethical health plans. If you doubt me, read this article on oral cancer drugs cost variation among D plans. Seniors who have the misfortune of choosing the wrong plan to be on when they discover they have cancer can have to pay the value of a house to get access to some drugs on the plan.

D was hugely irresponsible, expensive and deceptive public policy, designed for the industry rather than recipients and at extraordinary expense to taxpayers. As Mr. Laszewski points out, "Make no mistake, seniors deserve a drug benefit, but they deserve one that is part of a reformed Medicare system that is sustainable."

That is true, but its his closing line that is the sum and substance of why D was a pure act of worst kind of politics.

What’s the point of winning in the first place if you only use the platform to win the next one and leave $8 trillion in unfunded liability in the process?

HEALTH2.0: The People's choice award

By now you know that the Health2.0–User Generated Healthcare Conference organized by Matthew Holt (THCB) and Indu Subaiya (Etude Scientific) is all set to take place on September 20th in San Francisco.   Among other things, there are four fabulous demo panels on Search, Tools for Consumer health, Providers and Social networks, and Social Media for Patients.

You would not believe how many people want to show their cool tools on these panels. Well it just so happens that we ended up with one spot left on the Social Media for Patients Panel. We already have the wonderful Amy Tenderich (DiabetesMine) to moderate. On the panel are OrganizedWisdom, DailyStrength, MedHelp, PatientslikeMe & SophiasGarden.

So how to choose the remaining panelist from so many great possibilities? Too tough for us to decide, so we’re throwing it over to you. The contenders, listed in no particular order with a line or two of description are below. Please go take a look—don’t worry if these don’t exactly fit your definition of “social media”—we have ways of shoehorning the most interesting sites into our program.

We’re going to keep this post close to the top of THCB everyday for a while so you don't have to look at all of them all at once. Please got to this survey to give us your impression of what you see.  The one that gets the best ratings will be chosen to be on the panel and get to demo to the crowd from the stage

The contenders

healthcare.com — a combined search/content/patient management/communication site; company recently got significant venture funding.

Xoova.com — a physician directory with a twist allowing you to search by all types of specialties and conditions (that’s the media part); new company with big ambitions to connect patients with doctors, run by an AOL veteran.

Lifespring Health — Social networking meets healthcare’s consumer age. Participants earn points when they shop online to help cover their healthcare costs and other expenses – friends and family who participate can contribute points as well. LifeSpring has brought Health savings accounts (HSAs) into the mix and forged partnerships with online retailers including drugstore.com, barnes and noble and GNC.com.  A clever model. Expect to hear more from these guys in the future ...   

Solos Health - active in healthcare as an information provider since 2000, Solos provides nutrition counseling and maintenance for 180,000 diabetics as well as disease management services for other areas. The company also recently launched the ambitious Breastcancerawareness.org, a site driven by online PSAs. 

ClinicaHealth —creates disease-specific social networks for patients, family members and caregivers, usually through other organizations such as the Lung Cancer Alliance and the WomenHeart Community.

Dlife – Is a combined community rich media site for diabetics. It also has a cable TV program on CNBC called dLifeTV

The American Cancer Society has some of the most vibrant online message boards anywhere. It may look a little Web1.0 but it’s a powerful community

healthcentral.com is a veteran health site, focusing on providing expert information and with a great number of vibrant communities.

HealthWorldWeb — a new very ambitious site integrating provider search, patient blogs, content, video information and much more.

Wellness-layers.com is another “inside” engine that powers other community and content sites. One example is DietWatch. The company recently built a specialized community for weight-loss giant NutriSystem.

SocialText - this groundbreaking enterprise Wiki provider sees itself as a natural for healthcare industry and wants to do business with both providers and payers. Humana is one early customer.

Starlight Starbright - this established children's foundation has been running online support programs for chronically ill children and those facing life threatening illnesses for more than a decade. Starbright World allows kids and their siblings to connect through a social network using blogs, online chat and other interactive features.

icyou — Just launched (by BenefitFocus) combines user-generated video with professionally produced web only segment. Apparently certain other non-health care focused video sites have done rather well, I hear. Perhaps they can replicate that success in healthcare. It’s in early beta, but certainly one of the most interesting Health2.0 video sites.

So please take a look and come over to this survey to let us know what you think, and which one you’d like to see on the panel

Can We Talk, Frankly? - Brian Klepper

Over at The Doctor Weighs In, Bill Bestermann literally grabs our attention and forces feeds us a highly informative, and, dare I say, USEFUL physiology lesson in If You Want To Get It Up - You've Got To Get It Down. The subject is the one topic that men (and the women who care about men) really care about: erections. That's right. Ever thought that even you (or your male partner), burly, strapping man among men, could be afflicted with erectile dysfunction? Get the skinny on the why, what it means and what to do about it from Dr. B. In the process, you'll get a glimpse of the Marlboro Man and learn some fascinating background on how Viagra came about.

A Broker Afterthought: An Acknowledgment, An Apology and A Criticism - Brian Klepper

In the comment section of my post on broker compensation, KWeller properly points out that 1) some states regulate broker commissions more stringently than Florida does and 2) I do a disservice to brokers who practice without financial conflict. He is right, and I apologize to anyone whose practice is at odds with my description.

On the other hand, as several other commenters noted, the practices I described are well-known and widespread, and they occur because the brokerage profession does not self-regulate very effectively. (If it makes anybody feel better - it shouldn't - neither do many other groups of health care professionals.)

So if you're not one of the broker's I was referring to, please excuse me then for pointing to the poor behavior of your colleagues. I wouldn't have tarred you with the same brush if you had held your fellow brokers to a higher standard of practice.

Consultants to Hospitals: Prepare for Transparency - Brian Klepper

We must view and treat the community as the "owner" to whom we are fully accountable. Aggregate financial performance data, aggregate productivity performance and aggregate quality and patient satisfaction data belong in the public realm. How else can consumers make a decision to...support us?

-- Rich Umbdenstock, President and CEO
American Hospital Association
Interview in Hospitals and Health Networks, 10/18/04

Most health care professionals sincerely believe in performance transparency, especially if it applies to someone else. Three years after the encouragement of Mr. Umbdenstock and similar pronouncements by colleagues throughout the industry, many physicians, health plan executives and hospitals executives remain extremely resistant to public reporting of pricing and performance.

Norton Healthcare in Louisville KY has developed one of the most progressive and forthright quality reporting efforts in the country. On their site, they provide their performance figures on a range of indices, indicating where they fall above or below national benchmarks. (You can just imagine how thrilled their staffs were with this decision to "bare all." ) The home page for their quality section lists six principals that drive their reporting.

   1. We do not decide what to make public based on how it makes us look.

   2. We give equal prominence to good and bad results.

   3. We do not choose which indicators to display.

   4. We are not the indicator owner.

   5. We display results even when we disagree with the indicator definition.

   6. We believe unused data never become valid. 

Norton sets a fine example for hospitals. But now, as demands for transparency become more compelling, the mega-consulting firms, always quick to lead the way and claim credit once a trend has been firmly established, are throwing their hats into the ring as well, hoping to provide guidance for tidy if exorbitant sums.

And so it is not surprising that the consulting firm Grant Thornton, in its spring newsletter Health Care Rx, has a thoughtful, pragmatic article urging hospitals to review and potentially change their pricing, document justifications when necessary, and generally take steps to ensure that they're prepared as transparency efforts become irresistible. Its a good piece and, for hospital execs, well worth a few minutes time.

Podcast: Mello on Health Courts

Professor Michele Mello, an expert on the health care justice system at the Harvard School of Public Health, has an interesting 9.5 minute audio podcast on why health courts would be an improvement over the current medical liability system. The development of her health court proposal was funded jointly by The Robert Wood Johnson Foundation and Common Good.

The Presidential Candidates On Health Care

Over at the Huffington Post, Dr. Susan Blumenthal and her team at the DC-based Center for the Study of the Presidency, have released their third in a series of articles comparing the Presidential candidates positions on various aspects of health care. This piece focuses on their views on the scientific and medical research that underlie progress in public health.

This has undoubtedly been yeoman's work for this group of researchers, and as the election draws closer we're indebted to them for making these positions so clear.

My guess is also that this article's topic is particularly dear to Dr. Blumenthal, who is a former Assistant Surgeon General and recent recipient of the US Public Health Service's Distinguished Service Medal.

Managed Care Redux - by Brian Klepper

Like democracy, managed care is a great idea. It's just that its rarely been tried.

Even so, my guess is that its about to re-emerge in a new, improved form, and possibly with some other name. If the signs around us now have any meaning, it will be different than our experience of a couple decades ago, and much truer to the original principles and possibilities that first caught our attention.

Last week the New York Times’ David Leonhardt ran another pop health economics piece, exploring several presidential candidates’ notion that the savings captured by providing better care could fund the uninsured. He explains better care as really being prevention – making sure that patients get services that stave off illness – and better management of the care process once they do get sick. And then, quoting a variety of health care experts, he takes issue with the notion that these approaches actually produce returns-on-investment. The problem, you see, is that while you may save money on the diabetic who avoids hospitalization to get his foot removed, you’re spending money taking care of all those diabetics who wouldn’t ever have had a costly problem.

He also worries that doing care correctly mostly amounts to telling patients “No,” that they can’t have certain treatments that they want or might need. He apparently isn't familiar with the doctor as expert, saying, “Uh, No. The science says that what you’re asking for is not the best treatment.”

Mr. Leonhardt is the NY Times’ resident economist and, well, I’m not. And he is correct that the jury is still out on whether wellness and disease management programs always save money. (Although there’s compelling data showing that when chronic conditions are managed in the field, face-to-face and consistently over time, those programs can have a significant impact.)

Still, despite his impeccable credentials, I have a different view than Mr. Leonhardt about where the recoverable savings are in health care. Yes, there are some savings in preventive care and chronic disease management. But there are much larger savings in eliminating the financial conflicts and perverse incentives that pervade virtually every area of health care.

There is no concrete number for or consensus on the amount of waste in the system. Health care is mind-bogglingly vast, with nearly an infinite number of processes. So no comprehensive inventory has ever been undertaken. But there are notions. Don Berwick at the Institute for Healthcare Improvement and Jack Wennberg from Dartmouth peg it at about a third. I recently spoke to two very experienced physician administrators, one from a major health system and one from a large health plan, who each guessed half or more. When you start ticking off all the ways that care is compromised by financial conflict or, for that matter, old-fashioned thinking, it is difficult to not side with the physician administrators.

There are endless nook and cranny stories. Take diabetes, which currently consumes about $165 billion per year, or 7.5% of the nation’s health care spending. We know, for example, that we’re able to identify only two-thirds of America’s diabetics. We don’t know who the other one-third are, because they show up only occasionally at Emergency Departments or doctors’ office in dire need of treatment. Of the 2/3 we know about, though, the claims data show that only about half get a HbA1c test every six months, the minimum protocol for stable diabetics. The other half of known diabetics, who also see physicians regularly, don’t receive this test. (Their doctors apparently missed that class.) This means that 2/3 of our diabetics – the 1/3 who aren’t getting regular care and the 1/3 who are but aren’t being monitored properly - almost certainly have exacerbated conditions that push our bills for diabetes care way beyond where they ought to be. There’s probably a $50-100 billion savings in that group alone. The upper figure is enough to replace our national health care IT infrastructure in 2.5 years.

Then there’s diagnostic imaging. Physician ownership of these devices has created terrific incentives for self-referral, a trend that industry-watchers say has fostered a 35% over-utilization rate, and has given rise to several imaging management firms that help health plans enforce appropriate application of these tools.

Or cancer. Many community oncologists now make twice as much (or more) from the rebates they receive from drug companies as they do from being physicians. There is good data showing that many oncologists alter their prescribing behaviors to optimize profitability rather than adhere to best practice. By contrast, academic oncologists, who work in settings that don’t allow them to profit from their treatments, appear to have different prescribing patterns.

Or sloppy and unsophisticated purchasing practices. The Sisters of Mary Health System in Springfield MO saved millions of dollars and 176,000 drug errors annually by using IT to get better end-to-end control of their supply chain.

These stories are endless. Of course the best summary work on this topic has been developed by Dr. Wennberg through the Dartmouth Atlas, which shows dramatic cost and practice variation across the US for identical conditions.

Variation in the Average Cost Per Medicare Recipient by Region

My friend Jerry Reeves MD, the national Chief Medical Officer for the Unite Here Union and a consultant to many health management projects around the country, shows a simple slide that illustrates this point dramatically. It was developed several years ago, when he was the Medical Director for the Culinary Fund Health Plan in Las Vegas. In it, he takes several straightforward conditions, holds outcomes constant, and then shows the resources required by the lowest cost, highest cost and average Vegas physician. The results are startling. The most expensive doctor often costs 8 times as much as the least expensive one to get the same outcome.

Physician Costs for Specific Conditions in the Las Vegas Market

Of course, the excess in America’s health system doesn’t just happen. Its structure creates incentives for waste. Fee-for-service reimbursement, the prevailing payment methodology for the last several decades, rewards the delivery of more products and services rather than the right services. A lack of pricing and performance transparency makes it difficult to see poor or even dangerous performance when it occurs and, worse, has created an opportunistic culture throughout the entirety of the health care sector. And by spending a small but still significant portion of the largesse – about $350 million out of $2.2 trillion in industry revenues in 2006 – on lobbying, the industry convinces our federal lawmakers that the status quo is worth preserving.

If one is serious about figuring out how to fix health care, there is no stock in being ideological about it. It is a structural process, and the solutions are both in the marketplace and in policy.

And it’s complicated. That’s the thing to remember. Single payer won’t be a magic bullet, because that’s just how the money flows, not how cost is created in the supply chain or care delivery sectors. Individual responsibility won’t solve it, because patients need information that’s currently not available, and the scale of health care cost has now risen far beyond the ability of most families to handle it on their own. Simply helping the uninsured won’t help, because the bigger problem is that the middle class is being priced out of the coverage market, and that could disrupt both the health care economy and, because health care is the nation’s largest economic sector, the larger economy. And despite what Mr. Leonhardt thinks, nor will prevention and disease management, because they're just a small part of a much larger and more complex set of problems.

There are a lot of interesting and productive new trends in health care, and they're all converging on the crisis. The Health 2.0 meeting will explore one. But there is progress with transparency, performance-based reimbursement, worksite clinics, supply chain management, health care information interoperability, and on and on.

My sense is that we’re about to see a new era of managed care, where the market players finally do all the things they promised to do last time but never did: analyze and reward performance, give patients, providers and purchasers better information to make better decisions, and invest in tools and processes that drive waste and inappropriateness out of the system. All this would be a breath of fresh air for America.

If we’re going to fix the system, first we have to understand what’s really wrong with it. And that will provide a basis to understand whether the solutions that are offered are likely to have a shot at helping.

Then we have to find leaders who can drive the necessary changes in Congress. These people will likely be mostly from outside of health care, and they will drive for change not because they care particularly about health care, but because they think that a health care economy in turmoil could poison the larger American economy. Whatever. That could work.

All this is happening now. The losers will be the old guard, the people who want to protect their share of the excess at the expense of a workable health system for the nation. The winners? That would be everybody else.

Pharma PR: Either ‘Roid Rage or Comatose by The Industry Veteran

    Two examples emerged in the last few days to indicate that Big Pharma’s CEOs are unable or unwilling to control the functional departments of their companies.  The first involves GlaxoSmithKline (GSK) where CEO J.P. Garnier actually instigated the problem instead of managing it.

    In response to major controversy and an FDA advisory committee hearing over the safety of GSK’s diabetes drug, Avandia, Garnier launched a George Bush/Karl Rove style of PR blitz.  The campaign started by blithely ignoring the empirical reality of three separate studies (by Steven Nissen in The New England Journal, GSK itself and the FDA staff) that found Avandia raised the risk of myocardial infarction by 30%-40%.  Instead GSK cried that it was a political victim.  In a self-righteous and self-pitying display, the company’s US Pharmaceuticals president, Chris Viehbacher claimed on June 15, "In the end science will win."  Then on July 9 the company’s media relations people arranged for Garnier to give the Wall Street Journal the benefit of his successful experience at managing through crisis.  There we learned his battle tested lessons such as “fight data with data,” communicate with employees daily, and other drivel to the effect that a dog has four legs. 

    

But the pièce d’occasion was Garnier’s micromanagement of his PR department to place a puff piece interview with him in The Economist of August 2.  The British magazine’s interview was more typical of the vanity profiles in Pharmaceutical Executive or the other, industry publications than straight journalism. The Economist touted Garnier’s successful “defence of Avandia,” a characterization made despite a nearly 25% drop of Avandia sales and a 14% decline in GSK stock since Nissen’s NEJM article in May.  “He came out swinging,” gushed the UK rag, “accusing critics of politicising the regulation of drugs and rebutting the study's claims with his firm's own data [that wasn’t appreciably different than Nissen’s].”  At least one of the writers or editors involved in that arranged piece of claptrap must have been positively heroic in suppressing the gag reflex when Garnier declared, “My generation of chief executives is the first that ‘gets it,’ ” Gets it?  Gets what? Gets a $200 million termination bonus after substantially reducing the company’s capitalization?

   For a week or so GSK even supported the PR offensive with an increase of in-person sales calls.  Alas, objective reality eventually intruded on August 13 when the London Telegraph reported the company’s intention to cut the sales force and other promotions in light of Avandia’s inexorable slide.

   After Garnier’s bluster and his all-hands-on-deck approach to reviving Avandia, his maniacal bragging, followed by sudden capitulation, make Pharma execs look like Muammar Qaddafi, Saddam Hussein and other tinhorn dictators from the Middle East.  First there are rants about “the mother of all battles,” then a complete rout followed by an abrupt flight.  Honestly, can investors, regulators or the general public take these clowns seriously.

    After GSK’s PR ‘roid rage, Johnson & Johnson’s PR appeared to be in a stupor when its lawyers decided to sue the American Red Cross for using the emblematic, red bisect.   In his commentary John Mack cited my own piece here last week about the current ascendancy of lawyers in Pharma.  Both the GSK and the J&J cases exhibit a clear lack of corporate leadership.  A fundamental element of corporate leadership involves resolving the conflicts of functional departments and getting them to operate in a manner that advances the organization’s fundamental interests.  At times the legal counsel, PR, finance, marketing, sales, government affairs or clinical research can each get carried away with itself and, in so doing, create problems. Either the CEO or COO must harmonize them.  When one department falls asleep at its desk and allows another to seriously jeopardize the company’s public image, it is the CEO’s responsibility to awaken the one and slap down the other.  Of course when the CEO’s narcissistic ego and arrogance create such an imbalance, there’s no one left to restore the equilibrium or provide the wise overview.  Management must tread a fine line between presumptuousness and self-effacement.  Sadly, Pharma leadership today is so unbalanced by shortsighted greed and lack of vision that it seems incapable of walking such a line, preferring instead to trudge along with one foot on either side.

It's Dawned On The New York Times Too - Brian Klepper

It would have been hard for the Times to have lobbed the Health 2.0 conference a slower pitch. They have a nice piece today, Dr. Google and Dr. Microsoft, explaining how, as health care information becomes increasingly centered around and focused on patients, the various IT giants are mobilizing. They're competing to provide solutions that put the patient in control but that ensures that their information is secure, accessible and useful to all the parties involved. The article pays the most attention to the two behemoths, Google and Microsoft, but acknowledges the larger cast of characters who are in this space, most of whom will be presenting at Matthew and Indu's meeting in San Francisco on September 20.

While the Times article is a good overview that acknowledges the significant challenges facing each of the entrants to Health 2.0 space, it is still just a taste. To get a richer flavor of the upcoming meeting and a deeper sense of what one of the players, Google Health, is probably up to, read through Vince Kuraitis'  very thorough analysis. It certainly was an eye-opener for me.

Brokers: Why They Feel Their Commisions Are Justified (Sort Of) - Brian Klepper

As you might imagine, yesterday's post on the excessive and deceptive nature of broker compensation raised a few hackles. I received several protests from brokers/agents who argued that they are saddled with inordinate responsibilities in exchange for their commissions.

In the interests of fairness, we should first keep in mind that what brokers do for the money is distinct from the inappropriateness of the scale and manner of their compensation. These are separate issues, and despite what many of them say, it is difficult to reconcile their inherent financial conflicts with the plans and their representation that they are employer advocates.

Then we should put aside most people's two natural responses to brokers' pleas that we appreciate their workload: 1) Who cares? and 2) How is this different than the rest of us?

But with those issues out of the way, brokers' arguments about the relationship between their compensation and responsibilities do make a significant statement about their role as flak-catchers, trouble-shooters and intermediaries between an increasingly dysfunction and unresponsive health plan system and increasingly irate enrollees and employer benefits managers. Here are a couple more comments, from the same, very articulate broker I quoted yesterday.

As a personal aside I want to emphasize that this guy's not whining - he was the one who brought up the subject of crazy broker compensation in the first place. Instead, he's trying to present a balanced perspective on how brokers are a cog in a much larger set of gears that are spinning out of control.

Your readers probably think I sit on my fat butt and collect big paychecks and do nothing for them.

Although my gross commissions would appear to most folks, at first glance, to be a pretty good paycheck, I have to pay myself for all my business expenses.

In exchange, I get to be on call 24/7 (yes, my clients frequently call me at all hours, since they often can't contact the carrier when their ID card doesn't work, or the hospital ER won't treat them if they can't verify benefits, or they're on vacation and break a leg).  I get to be psychiatrist, counselor, coach, and babysitter for my clients.  Since the advent of HIPAA privacy regs, I also get to be the focal point for every employee's medical problems (since their employers shouldn't be involved).  All of the animosity swirling around health insurance?  It's not directed at the carriers, or the employers, or the legislators, or the lobbyists. It is all laser-focused towards me - because I'm the guy they see.

Vacations are something other people take - I cannot take off two weeks, because there is nobody to do my job. The best I can hope for is a few days, and even then I'm tethered to email and voice mail.

The plan designs change constantly, carriers are always adding or deleting one benefit or another, and don't even get me started on how much the ever-changing networks cause grief for my clients (and ultimately for me and my staff).

Yes, the commissions are stupid money, but only in that they represent such a large part of the gross premium dollar.  Where it really breaks down is that the carriers are so inept, incompetent and ignorant that they've created and nurtured a tortured system that becomes more inefficient, more costly, more difficult to navigate every year - and increasingly, it is only us brokers and agents who stand in the way of total collapse. While I realize that the commission issue is important, it is just a symptom of a much larger problem.

I can't help injecting here that this reminds me of the $7/hour customer service reps for large companies - see my piece on Mega Life and Health - who take all the heat for their bosses who lay corrosive, self-serving plans, and then hide from view. The difference is that the brokers are paid very well for their role.

As several respondents have pointed out, there are better ways. Health information exchanges and standardized benefits structures could provide a lot of transparency and simplicity in an overly complex marketplace. Brokers could work for the purchasers as consultants. But of course they'd probably make less, and they won't be the ones who advocate for that.

Brokers: A Price Above Rubies by Brian Klepper

OK. Now that Matthew’s away, let take a break from picking on the doctors, the hospitals, the health plans, the drug companies, and the device companies. Let’s talk about the brokers.

Brokers, you’ll recall, connect health plans and employers. They typically represent themselves as unbiased, protecting employers’ interests and helping them objectively negotiate the hall of mirrors on the path to buying health benefits.

There’s only one problem with this story. Brokers are generally paid sales commissions by the health plans. They are not paid by the employer, but by the insurance companies. Which of course makes them maybe a teensy bit less objective than we might like.

And they’re not simply paid. They’re paid VERY WELL, often 6%-10% or more of the premium.

Here’s a note I received over the weekend from a broker pal in Florida where, like everywhere