Tuesday, May 31, 2016
Will Zika help or hurt health plans?
Health insurers are starting to think about the impact of the Zika virus, which may arrive in force in the US over the coming months. Actuaries are looking for analogous examples for their models, such as other mosquito born illnesses including dengue fever.
Some insurers aren’t too concerned, according to Healthcare Finance News. Others are looking at reinsurance opportunities and considering premium increases.
Most Zika infections cause only mild illness, so the costs of treatment will be modest or zero much of the time. The real impact is likely to come from the cost of lifelong care for babies born with microcephaly or other problems, which could be millions of dollars per case.
But does that mean Zika will hurt health plans financially? Not necessarily.
For commercial health plans, maternal and newborn care is one of the largest categories of expenses. If a Zika epidemic looms, I would expect women to stop having babies, at least for a while. After all, in El Salvador the government has suggested women not become pregnant for the next two years.
If that happens, insurers will enjoy a windfall from avoided expenses that will show up right away. Meanwhile, the costs of Zika babies will be spread over many years and no doubt much of the cost will be shifted to Medicaid one way or the other.
Zika is a huge threat and we should be doing much more about it as a society. But health plans may not suffer as much as people assume.
Image courtesy of duntaro at FreeDigitalPhotos.net
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By healthcare business consultant David E. Williams, president of Health Business Group.
from Health Business Blog https://healthbusinessblog.com/2016/05/31/will-zika-help-or-hurt-health-plans/
via A Health Business Blog
Monday, May 30, 2016
Sunday, May 29, 2016
Saturday, May 28, 2016
Friday, May 27, 2016
Thursday, May 26, 2016
Trouble ahead: Obese, diabetic 50 somethings heading for bleak senior years
It’s not too late
Today’s middle-aged adults (50-64) are much fatter and more likely to have diabetes than their predecessors from 15 years ago. Obesity is up 25 percent, diabetes 55 percent and the percentage reporting being in very good or excellent health declined by 9 percent, according to the latest America’s Health Rankings Senior Report from the United Health Foundation.
At the state level, some of the changes were far more dramatic. Prevalence of diabetes among middle-aged Coloradans is up 138 percent, while obesity rates in Arizona are up by 96 percent.
The report warns that today’s middle-aged cohort is on track for an expensive and unhealthy experience when they hit the ranks of seniors by 2030.
The news isn’t all bleak. My home state of Massachusetts is rated the healthiest for seniors in the latest report (overtaking Vermont). Seniors here have become more physically active; many have stopped smoking. On the negative side the rate of flu vaccination dropped in Massachusetts. (Maybe it has something to do with the vaccine’s recent lack of effectiveness — I got the flu vaccine and the flu this past season.)
As usual, this year’s report is chock full of statistics and insights, with a variety of national indicators and state-by-state comparisons. And no surprise, the Southern states remain the unhealthiest –with Louisiana, Oklahoma, Mississippi, Arkansas and West Virginia bringing up the rear.
It’s not too late for middle-aged Americans to improve their health and well-being. Reports like this may spur individuals, governments and private sector players into action. For the sake of seniors-to-be and the country as a whole, I sure hope it happens.
Image courtesy of Stuart Miles at FreeDigitalPhotos.net
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By healthcare business consultant David E. Williams, president of Health Business Group.
from Health Business Blog https://healthbusinessblog.com/2016/05/26/trouble-ahead-obese-diabetic-50-somethings-heading-for-bleak-senior-years/
via A Health Business Blog
Wednesday, May 25, 2016
Tuesday, May 24, 2016
Monday, May 23, 2016
Canada is looking better and better
O Canada!
In almost every election cycle people talk about moving to Canada if a presidential candidate they despise takes office. In practice few make the move. Things could be a little different this time around if a certain nationalist strongman comes to power.
But there’s something else to fear this year: the Zika virus. According to NIH director Tony Fauci, mosquitoes with Zika are likely to arrive in the US mainland within the next month or two. One species will be all over the South, another will come up the East Coast as far as New England. Congress is dithering with the President’s request for funds to combat Zika’s spread and is toying with the idea of canceling Ebola funds to partially support the Zika fight. It’s pretty irresponsible.
In the past I would have assumed that Congress would get it’s act together and do the right thing. But after seeing some members unconcerned about preventing a default I no longer take good intentions and common sense for granted.
Zika is serious and its spread could have a big impact on economic growth. In El Salvador, the government has advised women not to get pregnant for the next two years, lest they give birth to babies with severe birth defects. Can you imagine the impact such an advisory would have in the US?
Image courtesy of Vlado at FreeDigitalPhotos.net
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By healthcare business consultant David E. Williams, president of Health Business Group.
from Health Business Blog https://healthbusinessblog.com/2016/05/23/canada-is-looking-better-and-better/
via A Health Business Blog
Sunday, May 22, 2016
Saturday, May 21, 2016
Friday, May 20, 2016
Health Wonk Review is up at Boston Health News
Check out the latest edition of the Health Wonk Review over at Boston Health News. Tinker Ready has a great collection of posts about insurance, HIT, report cards, LGBT health and cancer.
And you won’t want to miss the beautiful collection of photos of the Sant Rafael Pavilion in Barcelona.
from Health Business Blog https://healthbusinessblog.com/2016/05/20/health-wonk-review-is-up-at-boston-health-news-6/
via A Health Business Blog
Thursday, May 19, 2016
The false link between mental illness and gun violence
It would be nice if we could eliminate mass shootings by improving the mental health system, coaxing (or forcing) potential shooters into treatment before they have a chance to wreak havoc. As the Washington Post (Most mass shooters aren’t mentally ill. So why push better treatment as the answer?) reports:
“It would be ridiculous to hope that doing something about the mental-health system will stop these mass murders,” said Michael Stone, a forensic psychiatrist at the Columbia College of Physicians and Surgeons and author of “The Anatomy of Evil,” which examines the personalities of brutal killers. “It’s really folly.”
This seems pretty obvious, and yet Republican and Democratic leaders, along with the general public and the media seem to think mental illness is the root cause of shooting sprees and that improving the mental health system can fix the problem.
After mass shootings, reporters often jump quickly to mental illness as the cause. Remember after the Sandy Hook shooting when there was speculation that the shooter’s Asperger’s diagnosis was to blame?
Asperger’s? Are you kidding me?
The danger of our fixation on mental illness as the root cause of violence is that we end up stigmatizing people with mental illness –and developmental disorders– while ignoring more direct causes of gun violence, such as ready access to guns.
Mass shootings are rare outside the US. Is there someone who can tell me with a straight face that the difference is due to better mental health systems abroad?
Meanwhile, Australia has seen a major decrease in gun violence over the past 20 years since adopting strong gun control after a mass murder. That seems like a more evidence and logic based response than what we’ve tried here.
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By healthcare business consultant David E. Williams, president of Health Business Group.
from Health Business Blog https://healthbusinessblog.com/2016/05/19/the-false-link-between-mental-illness-and-gun-violence/
via A Health Business Blog
Wednesday, May 18, 2016
Tuesday, May 17, 2016
Monday, May 16, 2016
Saturday, May 14, 2016
Friday, May 13, 2016
Thursday, May 12, 2016
Wednesday, May 11, 2016
Biosimilars are “me-too” drugs, not generics
Time to take off the blinders
Generic drugs are the biggest success story in healthcare cost containment. This great success has fooled policymakers, journalists, health plans and others into thinking that the same model will tame spending on biologic drugs the same way it has for traditional, chemical based products.
The latest example can be found in the Wall Street Journal (Knockoffs of Biotech Drugs Bring Paltry Savings). The article blames the lack of savings on price increases by makers of the original products in the run-up to the introduction of competing products. That is happening, but it doesn’t get to the root cause of the situation.
The traditional generic market is about as close as the healthcare industry gets to economists’ fantasy world of perfect competition where there is no differentiation among products, there are a large number of producers, and buyers understand that the products are all the same. As a result, prices trend toward marginal cost and it is not uncommon to see price reductions of 90 percent or more. Sometimes it’s 99 percent.
Biotech is very different. The “generic” products are not generic at all, rather they are close but not exact copies that cannot be freely substituted for one another. The number of producers will be small because they must go through the expense of clinical trials. And if the companies are smart (they are) they will do their best to make sure buyers realize there are differences among the products. One clue is that the products are referred to as biosimilars not biogenerics.
As I’ve been writing for ten years, this doesn’t sound like the market for generic drugs. Rather it’s much more like the “me-too” phenomenon we saw in the 90s with blockbuster categories such as statins. When Lipitor came in as the fifth statin on the market it didn’t advertise itself as cheaper and undifferentiated. Rather it used clever trial design and sales and marketing tactics to climb to the top of the pile.
Why wouldn’t a biosimilar try the same approach if possible? So far new entrants are pricing themselves a bit lower than the original product but if they can come up with better data from a trial why not make the price higher instead?
If we take off our generics blinders we can come up with ways to control costs while encouraging innovation. Since 2006 (A better idea than biogenerics) I’ve suggested regulating the price of biotech drugs once their patents expire. I still think it’s a good idea.
Image courtesy of iosphere at FreeDigitalPhotos.net
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By healthcare business consultant David E. Williams, president of Health Business Group.
from Health Business Blog https://healthbusinessblog.com/2016/05/11/biosimilars-are-me-too-drugs-not-generics/
via A Health Business Blog
Tuesday, May 10, 2016
Due diligence in middle market healthcare investing
Due diligence
Private equity firms investing in middle market healthcare deals face serious challenges in commercial due diligence. There are many companies that appear attractive, with $5M+ EBITDA, increasing revenues and enticing stories of how industry dynamics, customer relationships, technology differentiation and management excellence will take them to the next level. In the $3 trillion US healthcare industry, there are numerous billion dollar niches offering strong returns to companies that ride the wave of transformation.
Generalist investors and even healthcare specialists need support when performing due diligence in the middle market. The companies are large enough that their businesses are often complex, but small enough that there is little public information about them. Often the management team and prior investors may not have a good sense of customer demand and competitors. In addition, investors face information asymmetry, making it difficult to discern whether the management team is as confident as they seem or whether they have sensed a peak and are trying to bail out at the top.
The Affordable Care Act has set off a tremendous era of change in the industry, and diligence needs to reflect the latest understanding of how the ecosystem is changing. For example, the shift from fee-for-service to value based payments upends many business models but enables new ones. Provider consolidation can dramatically change buying dynamics as sales move to the enterprise level. The growth of public health insurance exchanges increases health plans’ appetites for cost-saving approaches.
Middle market investors have to be savvy about how they invest resources in diligence, so they often turn to boutique consulting firms that provide high value at a moderate price. In our consulting practice at Health Business Group, some of my favorite work is helping middle market private equity firms and strategic buyers test investment hypotheses and improve clarity about a company’s prospects through commercial due diligence. We interview the company’s customers and competitors, consult with industry analysts, and leverage our internal knowledge base and expert network.
Over the years we’ve worked with private equity firms and strategic acquirers, performing diligence on everything from wound care to medical benefits management to teleradiology to medical cost containment to pharma sales and marketing to healthcare information technology. Many of these deals have been completed and have resulted in long-term success. But we are unafraid to speak up and advise when a deal does not make sense, even when that’s not what our client wants to hear. Our closest relationships are with clients that we’ve steered away from bad deals.
Image courtesy of Stuart Miles at FreeDigitalPhotos.net
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By healthcare business consultant David E. Williams, president of Health Business Group.
from Health Business Blog http://healthbusinessblog.com/2016/05/10/due-diligence-in-middle-market-healthcare-investments/
via A Health Business Blog
Monday, May 9, 2016
Sunday, May 8, 2016
Saturday, May 7, 2016
Friday, May 6, 2016
Surgeons and truck drivers may soon have something in common
Climbing into the future
Many Americans feel economically insecure. Donald Trump and Bernie Sanders have latched on to these feelings, and both fault free trade agreements for stripping the country of good, steady jobs. Trade agreements are a convenient scapegoat, but the big threat to jobs is technology, not trade.
Over the past decades, technology has reduced the need for labor in many fields. Robots can perform repetitive, manual work like welding cars. Enterprise software and databases have replaced paralegals and bookkeepers. Computers can answer the phone and provide customer service.
As great as these dislocations have been, much bigger change is on the horizon. For example, there are more than 3 million professional truck drivers in the US; the industry pays pretty well, especially for a job that doesn’t require a college education. But often lost in the discussion of driverless cars is the concept of driverless trucks. It might take 10 or even 20 years, but driverless trucks will eventually be the norm, lowering costs while putting millions of truck drivers out of work. (Driverless cars will throw all the Uber drivers out of work as well.)
Believe it or not, surgeons face a similar threat. Surgeons have long used robotic tools to assist them, but historically the tools relied on surgeons’ manual skills. That’s changing, even for challenging procedures.
A new study demonstrates that robots can be used for soft tissue surgeries, even though these are tricky compared with surgeries on solid structures such as bones.
From Johns Hopkins University:
The researchers developed a robotic surgical system called the Smart Tissue Autonomous Robot, or STAR. It features a 3D imaging system and a near-infrared sensor to spot fluorescent markers along the edges of the tissue to keep the robotic suture needle on track. Unlike other robot-assisted surgical systems, it operates under the surgeon’s supervision, but without hands-on guidance. (emphasis mine)
The researchers compared STAR with expert surgeons using various methods:
“No significant differences in erroneous needle placement were noted among all surgical techniques,” the researchers wrote, “suggesting that STAR was as dexterous as expert surgeons in needle placement.”
The researchers say that the tools won’t replace humans but will “expand human capacity and capability.” How do they know that? I predict that in fact these robotic tools will cut down on the need for human surgeons.
Furthermore, once surgery robots get better than surgeons, robotic surgery will become the standard of care. It will be unethical to use a human surgeon when a safer, better alternative is available.
As a middle-aged management consultant with specialized knowledge and strong relationships, I’m not worried that robots are going to take my livelihood away. But I do worry a lot about the younger generation and wonder what will happen to their career prospects, economic growth, and our society.
Image courtesy of Salvatore Vuono at FreeDigitalPhotos.net
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By healthcare business consultant David E. Williams, president of Health Business Group.
from Health Business Blog https://healthbusinessblog.com/2016/05/06/surgeons-and-truck-drivers-may-soon-have-something-in-common/
via A Health Business Blog
Thursday, May 5, 2016
Health Wonk Review is up at Wright on Health
Wright on Health hosts the latest incarnation of the Health Wonk Review blog carnival. It’s the Pivoting Toward the General Election edition. Interestingly, multiple posts focus on the same topic as mine: United Healthcare’s exit from the Obamacare marketplaces.
But beyond those posts you’ll see a lot of variety, along with a striking gallery of candidate photos!
from Health Business Blog https://healthbusinessblog.com/2016/05/05/health-wonk-review-is-up-at-wright-on-health-12/
via A Health Business Blog
Wednesday, May 4, 2016
Tuesday, May 3, 2016
Monday, May 2, 2016
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