Wednesday, September 30, 2015

Why drug price regulation should not be ruled out


I’m a proponent of free markets and in general defend drug companies in their price setting, especially when they’re introducing new, innovative products with real clinical and financial benefits. See, for example, Hooray for high-priced hepatitis treatment Sovaldi.

But we have to remember that the reason high prices can persist in the market is that drugs are protected by patents and other restraints on competition such as the orphan drug law. Those rights are monopolies granted explicitly by the government. There’s really nothing free-market about them. Since the government grants these rights it should also be able to regulate the benefits that result from them.

In many cases the government wisely stands back and lets the market do its work. The generic market for small molecule pharmaceuticals is a case in point. When it works well –which is most of the time– prices fall by 90 percent or more once a patent expires.

But there are exceptions, where the government should consider stepping in. One example (highlighted on this blog in 2007: Abusing the orphan drug law to rip off customers) is when an old, generic drug gains new intellectual property protections for a use that is already common.

Another example that’s becoming more common is when large molecule drugs go off patent. The government is making a big mistake with its ‘biosimilar’ approach, which wrongly tries to apply the generic drug precedent to products that can’t be copied exactly. Instead, as I’ve been advocating since 2006 (A better idea than biogenerics) would be better to leave the original manufacturer with a monopoly, post-patent expiration but to regulate the price. This would be fairer and safer for patients.

We’re hearing a lot of noise about drug prices from politicians, doctors, drug companies, and patients. I won’t repeat what they say here, since you can easily find it elsewhere. This is a substantive issue, with no black and white answers. I’m glad to see it being brought forward into the public sphere.

By healthcare business consultant David E. Williams, president of Health Business Group.

from Health Business Blog
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Reynolds American, Keurig, and Comcast Move to Shore Up Future Opportunities *** INDUSTRY FOCUS ***

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Thursday, September 24, 2015

Healthcare: Why Drugmakers Are Shaking In Their Boots *** INDUSTRY FOCUS ***

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Health Wonk Review is up at Colorado Health Insurance Insider

Check out the Fall Colors edition of the Health Wonk Review at Colorado Health Insurance Insider.

You will learn the best and worst days to be admitted to the hospital. Plus view posts on physician ethics, ACA replacements, 2016 premiums, work comp spending, census data, IT, and medical records.

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Tuesday, September 22, 2015

BBJ power breakfast follow up

I enjoyed moderating today’s Boston Business Journal health care “power breakfast” with the CEOs of Blue Cross, Blue Shield of Massachusetts and Steward Health Care, and an EVP from State Street.

Coverage and photo gallery are on the BBJ site.

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Emotion tracking tools –only for trivial purposes?

Who am i?

Who am i?

I was surprised that the Boston Globe’s (Waltham firm helps computers learn empathy by mapping the human face) highlighted such unimportant opportunities for the technology. Here’s what MIT Media Lab spinoff Affectiva is doing, according to the Globe:

  • Helping companies measure emotional responses to advertising
  • Spitting out pieces of chocolate for Hershey’s when someone smiles at the machine

Maybe that’s not so bad for initial applications, but what’s down the road sounds pretty unimportant as well

“If a student got stuck on a tough math problem, an empathetic school computer would recognize the confused look on his face, and instantly offer additional help. An office laptop might see that a worker is bored, and suggest that he take a coffee break or play a simple computer game. A TV that notices that nobody laughed at last night’s Adam Sandler movie might suggest Woody Allen next time.”

Give me a break. A much more profound application for these tools will be to give people better insights into others’ emotions in live one-on-one and group interactions. It will be especially helpful for people with autism and Asperger’s, but it will also be useful for the average person to better understand how others react to them. The technology could (and I assume will) be built in to a next generation of Google Glass or similar.

I know some people who could use such a tool.

I’m not suggesting anything that hasn’t already been thought of, but the Globe should have done a better job reporting on this.

By healthcare business consultant David E. Williams, president of Health Business Group.


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Financials: Banking News Roundup *** INDUSTRY FOCUS ***

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Monday, September 21, 2015

See you at the BBJ Future of Healthcare ‘Power Breakfast’

I’m excited to moderate tomorrow’s Boston Business Journal ‘Power Breakfast’ on The Future of Healthcare at the Mandarin Oriental in Boston. We have a great panel lined up:

  • Steward Health CEO, Ralph de la Torre
  • Blue Cross CEO, Andrew Dreyfus
  • State Street EVP, Todd Gershkowitz

We’ll be discussing about healthcare costs, quality, and innovation.

By healthcare business consultant David E. Williams, president of Health Business Group.


from Health Business Blog
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Friday, September 18, 2015

Energy: We Will See Oil Production Slow Down... Eventually *** INDUSTRY FOCUS ***

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Concierge medicine 90210

LUX Health Network co-founder Akiva Greenfield

LUX Health Network co-founder Akiva Greenfield

LUX Health Network bills itself as “the most exclusive, personalized, and comprehensive health care experience.” Its concierge-style primary care and specialty physicians practice in Beverly Hills. It sounded interesting, so I interviewed co-founder Akiva Greenfield to learn more.

Concierge practices are typically primary care only, and I’ve often wondered about how they handle patients who need specialist care. So I’m interested to learn about the LUX model. How did you come up with the idea?

We talked with patients and we talked with physicians about what’s important in concierge style care. Patients told us that they certainly want great care from their primary care physician but, just as important, they consistently told us that they want outstanding seamless care from specialists as well. We believe this is a reasonable request, in fact it’s their prerogative.

So, I saw that this model of interdisciplinary care would fill a critical void in the concierge medicine marketplace. LUX Health Network has become the solution because we bridge the gap by providing highly-coordinated care among internists and specialists who all offer our concierge services.

LUX has assembled an elite network of specialist physicians who work as one team to deliver highly integrated, cross-disciplinary care, quickly and conveniently. LUX patients, who we refer to as LUX clients, have around-the-clock access to their team of specialists, who work in close coordination with their primary care physician to provide patients with a complete and synchronized healthcare experience. An added highlight of the LUX network is our client care coordinators who facilitate all scheduling and oversee insurance correspondence on their behalf, eliminating the stress and lost time that often precedes and follows medical appointments and procedures. Each member’s personal care team conducts periodic interdisciplinary conferences to discuss member needs, treatment, and progress to ensure full coordination of care.

Clients, especially those who are content with their internist, can also choose to pay for an annual retainer fee to receive concierge access to the specialist of their choice, who will work closely with their primary care doctor to develop a care plan tailored to client needs, and one that adheres to their preferences.

How does LUX compare to a typical concierge model? What are the similarities and differences?

We’ve been able to review and revise the way healthcare is delivered and managed from our unique perspective. LUX was not founded by physicians but by young entrepreneurs who have worked closely with doctors and thoroughly understand the healthcare industry. Other medical concierge models focus primarily on internal medicine. LUX is the first company to include internist and specialty medicine, where each physician practices independently and is not employed by us. We value their autonomy, as do they, and make the client-doctor connection, while keeping the physicians in full control of managing care. There are no limits to the number of concierge patients and/or families accepted by our doctors, a criterion imposed by other companies operating in this space.

To help support our network and clients, LUX’s client care coordinators serve as patient advocates and are at the patient’s disposal 24/7– no request is too big or too small. We even offer to correspond with insurance companies on behalf of clients so they can focus on what matters most to them. Additionally, our membership plans are fully customizable. We work with our clients to develop a mutually beneficial health plan.

Parts of our business model including membership-based concierge level access (same or next day appointment, unhurried visits, etc.), health and wellness options, and scheduling, is similar to that of other companies.

Typically primary care concierge practices convert their entire panels to the concierge model. Is that the case here as well? 

No. We do not require our physicians to convert their entire practices to a concierge style. Instead, they offer this extra level of care and access to patients who they believe can benefit from our programs. This allows the doctor to operate a hybrid practice, accepting both concierge and non-concierge patients.

It is often believed that a doctor with a hybrid practice will provide superior care to his or her concierge patients because of the promises made to them. Naturally, this can create an array of problems within a practice and to prevent such occurrences from arising, LUX works closely with doctors’ staff to reserve ample time on the schedule for concierge patients, well in advance of scheduling other patients. This alleviates the concern for non-concierge patients, knowing that patients paying an extra fee will not cut into their appointment time, and removes the burden from the doctors and their office staff by keeping the work day organized.

Do the specialists also convert their full panels? If not, what are the implications? If so, how many patients do you need in the LUX network to make that possible?

At LUX, specialists concierge model operates just like primary care model. They may keep their traditional care patients, while adding concierge style clients to their practices. The only change we request to be made is for them to cater to our concierge clients with the breadth of LUX services, which is agreed upon prior to them joining our elite network.

What happens to a patient if their specialty isn’t represented within the LUX panel? And doesn’t the idea of having access to just a few specialists run counter to the goal of maximizing choice? It sounds like it might be just another narrow network (albeit a gold-plated one). 

Most major specialties are represented by quality physicians in our LUX network. However, if a patient needs a specialist that is not represented in our network, we do our due diligence to find a doctor who is willing to join our network, and meets our admittance criteria outlinee by our Physicians Advisory Board, to serve the client. We are expanding our network of physicians to include other specialties like pediatrics, neurology, and psychiatry. It is also pivotal to our business to have larger numbers within each specialty, which is another area we are currently developing.

What happens when a patient is hospitalized? Does LUX have concierge hospitalists?

The client’s LUX primary care and/or specialty physician(s) will visit the hospital to ensure continuation of care.

One concern I have about concierge practices is that they appeal to physicians who want an easier lifestyle. I don’t begrudge them that, but concierge patients may actually prefer that their physicians are totally dedicated to the job. What do you think?

LUX network physicians are totally dedicated to their patients. In fact, I think that practicing medicine through the concierge model allows physicians to be more dedicated because they have more time to allot to each patient. Concierge medicine compensates physicians for the time spent to build a strong physician-patient relationship, thus allowing them to be more successful at their job and the care of their patients.

All your doctors are in Beverly Hills. Can the model work elsewhere or is this setup just for the rich and famous?

Our innovative approach to concierge medicine is designed for those who put a priority on their health and wellness and value their time. We plan to expand our model to other cities in California like San Diego and San Francisco as well as nationally. Although our main target audience tends to be a more affluent population, our plans are not designed exclusively for them. Our custom pricing is contingent upon the client’s medical needs and we do our best to match that. Our prices also reflect the caliber of physicians we’ve selected to be a part of our network. Each one has a stellar reputation among patients and other clinicians.

By healthcare business consultant David E. Williams, president of Health Business Group.

from Health Business Blog
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Thursday, September 10, 2015

Health Wonk Review is up at Medicare Resources

Steve Anderson at Medicare Resources hosts the latest edition of the Health Wonk Review. I’m flattered that he chose to dub it the Selfie Edition in honor of my blog post.

You’ll find some choice posts on Obamacare, ACOs, Medicare and more when you go check it out.


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Cadillac tax or Yugo tax: Which one would be better?

Yugo Tax anyone?

Yugo Tax anyone?

The main provisions of the Affordable Care Act are already in place, but a pretty important one is slated for 2018: a 40 percent excise tax that applies to the portion of employer-sponsored health coverage whose cost exceeds roughly $28,000 per family (or $10,000 per individual). This so-called “Cadillac Tax” is making people nervous, including traditional supporters of the ACA such as labor union leaders, who often negotiate generous benefits.

As usual, repealing this somewhat unpopular provision will be harder than it seems, especially since the tax is expected to raise about $80 billion over ten years and would need to be replaced by something that raised or saved an equivalent sum.

(The term “Cadillac” as a stand-in for high-priced luxury, is kind of quaint. Remember Cadillac dog food?)

There are actually two good reasons for this tax. First, it is one of a variety of funding mechanisms to help subsidize the cost of insurance for people with low and moderate incomes

Second –and controversially– It starts to phase out the tax deductibility of health insurance. Tax deductibility for health insurance is very popular. As a business owner I like it,  but as with other tax code special treatment like interest deduction on mortgages, it does distort the market. The distortion causes employees and employers to favor a one dollar increase in health benefits over a one dollar increase in wages. It’s not the only reason health insurance and healthcare costs have risen so much for so long while wages have stagnated, but it’s one reason.

It would be impossibly disruptive to get rid of health insurance deductibility all at once. The Cadillac Tax reduces deductibility gradually by indexing the tax threshold to general inflation, which has been running significantly lower than medical inflation. If those trends continue, the Cadillac Tax will affect more and more employers over time. (It would then be like the unindexed, Alternative Minimum Tax, originally designed to hit the richest but now falling mainly on the middle class –causing confusion and unfairness.) If health insurance inflation is reduced, then fewer companies will be affected.

If we don’t like the Cadillac Tax, there is an alternative, more broad-based approach that could raise as much funding while more directly accomplishing the goal of reducing or eliminating the tax deduction for health insurance. Call it the Yugo Tax or the Yugo/Cadillac Tax if you prefer. Here’s how it would work:

  • Eliminate the tax break on the first dollars of health insurance costs, maybe the first few hundred dollars or so to start. Increase the amount gradually over time. This would be analogous to the Social Security portion of FICA, which is charged on the first dollars of income but not the last. The amount excluded from tax deductibility would not need to start high because it would affect everyone.
  • Reduce the impact of the Cadillac tax by increasing the threshold at which it kicks in and lowering the tax rate.
  • As the Yugo/Cadillac Tax delivers more revenues, reduce other taxes or use the proceeds to reduce the deficit.

The main worry is that employers would stop offering health insurance to their employees over time as deductibility was phased out. Maybe they would, but maybe that’s ok. The Obamacare exchanges are doing pretty well, and if more people used them the markets would function even better. Competition for individual business would do more to keep health insurance costs down than trying to get employers to act.

As a sweetener for the introduction of the Yugo Tax we could drop the employer mandate. Who really needs that anyway?

By healthcare business consultant David E. Williams, president of Health Business Group.

from Health Business Blog
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Healthcare: Do This, Not That – How To Invest In Healthcare's Biggest Trends *** INDUSTRY FOCUS ***

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Thursday, September 3, 2015

Healthcare: Bursting Biotechs -- Are These Stocks Buys? *** INDUSTRY FOCUS ***

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via The Motley Fool charges in to healthcare with Health Cloud — interview with CMO Joshua Newman

Joshua Newman, MD --Salesforce's Chief Medical Officer

Joshua Newman, MD –Salesforce’s Chief Medical Officer announced its move into healthcare this week with Health Cloud, which aims to help providers manage patient relationships, not just patient records.

I asked Joshua Newman, MD, MSHS, who is Salesforce’s Chief Medical Officer and GM of Healthcare and Life Sciences to comment in more detail.

1) I think of Salesforce as a platform for sales teams to manage their leads. But it sounds like you have gone beyond that. Please explain.

Yes, that’s correct. We started in sales force automation (SFA) and are now the world’s No. 1 customer relationship management (CRM) company, which means that we help our customers connect with their customers — everything from sales to service to marketing to analytics. But it’s not like we just woke up one day and decided to take on healthcare. As healthcare becomes consumerized, organizations are in need of better CRM tools to connect and engage with patients. We’ve been serving healthcare companies for more than 15 years now, starting with life sciences firms — who obviously have a lot of salespeople — and now with many of the top providers and plans in the industry. It’s just that these companies previously needed to customize our products to work in their environments, and with Health Cloud we’re building much of that functionality out-of-the-box for the first time. We’re taking our experience in CRM and applying it to patient relationship management.

2) What is Health Cloud?

Salesforce Health Cloud is a cloud-based software designed for healthcare organizations. Built on Salesforce Service Cloud — the world’s #1 customer service and support application — the product gives providers a more precise view of a patient’s demographic, lifestyle and health information to better serve their needs. In doing so, it provides a complete view of patient data, including EMR information, medical devices, wearables and more. And Health Cloud also enables smarter care decisions through features like the Timeline view to visualizes a patient’s health over time. Finally, it allows providers to connect to a patient’s full care network, whether inside or outside the hospital. The Patient Caregiver Map visualizes relationships, and enables providers to collaborate with outpatient clinics, home caregivers and others to ensure the patient receives consistent, high-quality care.

3) How does Health Cloud differ from the offerings for other verticals? What’s unique about health?

Healthcare is such a different beast. The industry is ahead in the technologies used to conduct medicine — genetic testing and targeted cancer drugs and diagnostic imaging– yet woefully behind when it comes to the technologies used to manage patient relationships. Fortunately, for the first time in history, healthcare IT is shifting toward the patient. Payment and reimbursement is also distinct in healthcare. The Affordable Care Act (ACA) is pressuring providers to compete for patients like never before. And outcome-based reimbursement means providers receive Medicare and Medicaid funding based on process and quality metrics and not merely by the number of procedures. Finally, patient expectations in healthcare are slightly different and are shifting. Uber, Amazon and others have defined what a quality experience can be. Yet healthcare still often fails to consider patients as if they were customers. We think Health Cloud is the product for this unique moment, for this unique industry.

4) As a patient, am I a sales prospect?

Yes and no. As I said, providers are treating patients as customers for the first time in this environment — or “prospects,” as you say. And this is really a good thing, in that it means they are competing for their business in the way they communicate and the quality of care that they deliver. That is resulting in part to improvements in patient experience and outcomes.

5) What opportunities does health reform present? How are you addressing them?

With both the Affordable Care Act (ACA) and employers demanding more healthcare transparency, health providers need stronger patient engagement. ACA enabled health insurance for 16 million Americans, and subsequent court cases secured coverage for 6.2 million. This means that healthcare providers need to take lessons from consumer companies, as more people than ever before are prospective patients. Healthcare providers have an opportunity to change how they approach patient relationships. Salesforce Health Cloud also helps providers meet patients’ tech-savvy demands through its mobile capabilities. It enables providers to give concierge medicine focused on patient preference and satisfaction. Caregivers can follow up with patients once they leave the clinic, whether it’s an email, phone call reminder or message on a mobile app.

6) How does the health cloud offering differ from partner solutions —like Evariant and Veeva— that are build on your platform?

We’ve obviously built a partner ecosystem around Health Cloud, whether it’s companies like MuleSoft who help with integration into legacy EMRs, or systems integrators like Accenture and Deloitte who assist with content, implementation and more. It’s true that some aspects of partner solutions may compete with some aspects of Health Cloud — this is inevitable in the technology industry — but for the most part, we consider Health Cloud to be a platform for other partners to extend the product’s functionality. And, at the end of the day, it’s about giving customers what they want, so we leave it up to them to implement the solution that best fits their needs.

7) There are a variety of healthcare IT solutions out there, and many providers are investing heavily in EHR. How does health cloud work in that environment? What is the level of integration, cooperation, and rivalry?

EHRs do an important job. They are critical for ensuring the right data is captured for internal processes like billing and procedures within a clinical environment. But they do not help organizations manage the complexities of patient relationships. Today’s health systems need to make the shift from revenue cycle management and electronic health records, to building stronger patient relationships. With our open API, metadata-driven platform, providers can use Salesforce as an engagement layer on top of their legacy EMR systems. It gives them additional CRM, mobile and social capabilities, and they benefit from new innovations from Salesforce delivered three times a year.

8) Can you provide a couple of success stories?

Centura Health is using Health Cloud for several unique use cases. Centura Health’s oncology nurse navigators work in silos and leadership lacks visibility into the volume/ROI of work. Centura will use Health Cloud to align all oncology nurses onto a single platform, standardizing workflow and reporting to achieve better patient outcomes. Also, Centura Health has entered into bundled payment agreements with Centers for Medicaid and Medicare (CMS), and is turning to Health Cloud to track metrics for the post-acute portion of this process to include stays, outpatient therapy, home care, and avoidable emergency department revisits or readmissions.

9) What unexpected challenges have you faced in health?

I think the biggest challenge is extracting data from legacy EMRs, as they aren’t built with open APIs like most modern cloud-based platforms. Of course, we’re also seeing many middleware companies tackling this API problem, whether it’s replicating EMR data into separate data stores or building new interfaces to modernize the approaches of EMRs. The other challenge is the conservative culture and slow pace of change in medicine.  We are actually all very grateful for this culture. It served us very well in an era when people were literally selling snake oil.  However, we as patients need faster innovation and responsiveness to the changes in the world, and frankly, my colleagues in medicine have been clamoring for a more agile and nimble processes also – Learning System is how the IOM terms it. The healthcare industry has worked a certain way for so long now — and frankly has fallen behind in certain aspects — that it’s going to take great tools to enable change and the strength of consumerization and reimbursement changes to push providers into changing their ways. We’re excited about the possibilities, so is the industry.

10) How are customers implementing Health Cloud? Is it all or nothing or are there ways to experiment?

Health Cloud hasn’t officially launched yet, so it’s hard to tell with 100 percent accuracy. But I think we’ll see a similar adoption path to how cloud-based CRM technology — like that of Salesforce — was adopted years ago. Organizations tested Salesforce on certain use cases and departments, and eventually it spread to entire companies, buoyed by its ease-of-use and popularity with end users. I think we’ll see the same thing with Health Cloud.

By healthcare business consultant David E. Williams, president of Health Business Group.

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