ACO Winners and Losers: A Quick Take

Last week, CMS sent out press releases touting over $1 billion in savings from Accountable Care Organizations.  Here’s the tweet from Andy Slavitt, the acting Administrator of CMS:

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The link in the tweet is to a press release.  The link in the press release citing more details is to another press release.  There’s little in the way of analysis or data about how ACOs did in 2015.  So I decided to do a quick examination of how ACOs are doing and share the results below.

Basic background on ACOs:

Simply put, an ACO is a group of providers that is responsible for the costs of caring for a population while hitting some basic quality metrics.  This model is meant to save money by better coordinating care. As I’ve written before, I’m a pretty big fan of the idea – I think it sets up the right incentives and if an organization does a good job, they should be able to save money for Medicare and get some of those savings back themselves.

ACOs come in two main flavors:  Pioneers and Medicare Shared Savings Program (MSSP).  Pioneers were a small group of relatively large organizations that embarked on the ACO pathway early (as the name implies).  The Pioneer program started with 32 organizations and only 12 remained in 2015.  It remains a relatively small part of the ACO effort and for the purposes of this discussion, I won’t focus on it further.  The other flavor is MSSP.  As of 2016, the program has more than 400 organizations participating and as opposed to Pioneers, has been growing by leaps and bounds.  It’s the dominant ACO program – and it too comes in many sub-flavors, some of which I will touch on briefly below.

A couple more quick facts:  MSSP essentially started in 2012 so for those ACOs that have been there from the beginning, we now have 4 years of results.  Each year, the program has added more organizations (while losing a small number).  In 2015, for instance, they added an additional 89 organizations.

So last week, when CMS announced having saved more than $1B from MSSPs, it appeared to be a big deal.  After struggling to find the underlying data, Aneesh Chopra (former Chief Technology Officer for the US government) tweeted the link to me:

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You can download the excel file and analyze the data on your own.  I did some very simple stuff.  It’s largely consistent with the CMS press release, but as you might imagine, the press release cherry picked the findings – not a big surprise given that it’s CMS’s goal to paint the best possible picture of how ACOs are doing.

While there are dozens of interesting questions about the latest ACO results, here are 5 quick questions that I thought were worth answering:

  1. How many organizations saved money and how many organizations spent more than expected?
  2. How much money did the winners (those that saved money) actually save and how much money did the losers (those that lost money) actually lose?
  3. How much of the difference between winners and losers was due to differences in actual spending versus differences in benchmarks (the targets that CMS has set for the organization)?
  4. Given that we have to give out bonus payments to those that saved money, how did CMS (and by extension, American taxpayers) do? All in, did we come out ahead by having the ACO program in 2015 – and if yes, by how much?
  5. Are ACOs that have been in the program longer doing better? This is particularly important if you believe (as Andy Slavitt has tweeted) that it takes a while to make the changes necessary to lower spending.

There are a ton of other interesting questions about ACOs that I will explore in a future blog, including looking at issues around quality of care.  Right now, as a quick look, I just focused on those 5 questions.

Data and Approach:

I downloaded the dataset from the following CMS website:

http://ift.tt/2bORqyM

and ran some pretty basic frequencies.  Here are data for the 392 ACOs for whom CMS reported results:

Question 1:  How many ACOs came in under (or over) target

Question 2:  How much did the winners save – and how much did the losers lose?

Table 1.

Number (%)

Number of Beneficiaries

Total Savings (Losses)

Winners

203 (51.8%)

3,572,193

$1,568,222,249

Losers

189 (48.2%)

3,698,040

-$1,138,967,553

Total

392 (100%)

7,270,233

$429,254,696

 

I define winners as those organizations that spent less than their benchmark.  Losers were organizations that spent more than their benchmarks.

Take away – about half the organizations lost money and about half the organizations made money.  If you are a pessimist, you’d say, this is what we’d expect; by random chance alone, if the ACOs did nothing, you’d expect half to make money and half to lose money.  However, if you are an optimist, you might argue that 51.8% is more than 48.2% and it looks like the tilt is towards more organizations saving money and the winners saved more money than the losers lost.

Next, we go to benchmarks (or targets) versus actual performance.  Reminder that benchmarks were set based on historical spending patterns – though CMS will now include regional spending as part of their formula in the future.

Question 3:  Did the winners spend less than the losers – or did they just have higher benchmarks to compare themselves against? 

Table 2.

Per Capita Benchmark

Per Capita Actual Spending

Per Capita Savings (Losses)

Winners (n=203)

$10,580

$10,140

$439

Losers (n=189)

$9,601

$9,909

-$308

Total (n=392)

$10,082

$10,023

$59

 

A few thoughts on table 2.  First, the winners actually spent more money, per capita, then the losers.  They also had much higher benchmarks – maybe because they had sicker patients – or maybe because they’ve historically been high spenders.  Either way, it appears that the benchmark matters a lot when it comes to saving money or losing money.

Next, we tackle the question from the perspective of the U.S. taxpayer.  Did CMS come out ahead or behind?  Well – that should be an easy question – the program seemed to net savings.  However, remember that CMS had to share some of those savings back with the provider organizations.  And because almost every organization is in a 1-sided risk sharing program (i.e. they don’t share losses, just the gains), CMS pays out when organizations save money – but doesn’t get money back when organizations lose money.  So to be fair, from the taxpayer perspective, we have to look at the cost of the program including the checks CMS wrote to ACOs to figure out what happened.  Here’s that table:

Table 3 (these numbers are rounded).

 

Total Benchmarks

Total Actual Spending

Savings to CMS

Paid out in Shared Savings to ACOs

Net impact to CMS

Total (n=392)

$73,298 m

$72,868 m

$429 m

$645 m

-$216 m

According to this calculation, CMS actually lost $216 million in 2015.  This, of course, doesn’t take into account the cost of running the program.  Because most of the MSSP participants are in a one-sided track, CMS has to pay back some of the savings – but never shares in the losses it suffers when ACOs over-spend.  This is a bad deal for CMS – and as long as programs stay 1-sided, barring dramatic improvements in how much ACOs save — CMS will continue to lose money.

Finally, we look at whether savings have varied by year of enrollment.

Question #5:  Are ACOs that have been in the program longer doing better?

Table 4.

Enrollment Year

Per Capita Benchmark

Per Capita Actual Spending

Per Capita Savings

Net Per Capita Savings (Including bonus payments)

2012

$10,394

$10,197

$197

$46

2013

$10,034

$10,009

$25

–$60

2014

$10,057

$10,086

-$29

-$83

2015

$9,772

$9,752

$19

-$33

These results are straightforward – almost all the savings are coming from the 2012 cohort.    A few things worth pointing out.  First, the actual spending of the 2012 cohort is also the highest – they just had the highest benchmarks.  The 2013-2015 cohorts look about the same.  So if you are pessimistic about ACOs – you’d say that the 2012 cohort was a self-selected group of high-spending providers who got in early and because of their high benchmarks, are enjoying the savings.  Their results are not generalizable.  However, if you are optimistic about ACOs, you’d see these results differently – you might argue that it takes about 3 to 4 years to really retool healthcare services – which is why only the 2012 ACOs have done well.  Give the later cohorts more time and we will see real gains.

Final Thoughts:

This is decidedly mixed news for the ACO program.  I’ve been hopeful that ACOs had the right set of incentives and enough flexibility to really begin to move the needle on costs.  It is now four years into the program and the results have not been a home run.  For those of us who are fans of ACOs, there are three things that should sustain our hope.  First, overall, the ACOs seem to be coming in under target, albeit just slightly (about 0.6% below target in 2015) and generating savings (as long as you don’t count what CMS pays back to ACOs).  Second, the longer standing ACOs are doing better and maybe that portends good things for the future – or maybe it’s just a self-selected group that with experience that isn’t generalizable.  And finally, and this is the most important issue of all — we have to continue to move towards getting all these organizations into a two-sided model where CMS can recoup some of the losses.  Right now, we have a classic “heads – ACO wins, tails – CMS loses” situation and it simply isn’t financially sustainable.  Senior policymakers need to continue to push ACOs into a two-sided model, where they can share in savings but also have to pay back losses.  Barring that, there is little reason to think that ACOs will bend the cost curve in a meaningful way.

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Watermelon Pizza Two Ways

Soon after I posted my super trendy Sweet Potato Toasties, I had to jump on the watermelon bandwagon. It is the perfect summer treat even if September is just around the bend. And well hey, we still have 3.5 weeks of summer left! 

I knew this watermelon pizza would be an instant hit in our home because Walker loves anything with the word pizza. When I was pregnant Walker was in pizza heaven because we ate it often. Honestly, we could have ate pizza every day for 14 days and he wouldn’t have complained, ha! He was a big fan of this watermelon pizza even though wasn’t covered in tomatoes and cheese. 

Not only is this pizza super pretty but it’s good for you too. And you already know I love making food pretty if you saw my last TV segment talking about how to beautify your plate with flowers. When food is beautiful and more pleasing to the eye, you are more likely to mindfully eat. This might sound silly but mindful eating is a great strategy to improve your overall health. 

Watermelon Pizza

Now I realize that some people worry about the naturally occurring sugars in watermelon but it’s a bit of a misconception that watermelon is the most sugary of all fruits. In fact blueberries and bananas are higher in sugar. But don’t worry about that! Just eat these fruits with some blood sugar balancing fats — this is where my perfectly balanced watermelon pizza comes in! 

Watermelon Pizza

I added some sheep’s milk yogurt but you could use any kind of yogurt, coconut yogurt would be lovely too — this is what helps to balance the sugars because yogurt is a great source of both good fat and protein. 

You could enjoy this as a nourishing snack or even dessert.

Watermelon is a great source of the following: 

  • rich in carotenoid phytonutrient lycopene, which is an important antioxidant and anti-inflammatory for promoting cardiovascular health
  • eye-health promoting carotenoid beta-carotene
  • beautifying, skin-health-boosting vitamin C
  • water, but you already knew that because that’s how watermelon got its name from being one of the most water-dense hydrating fruits 

Here’s the first recipe for my Watermelon Yogurt Pizza. By the way, if you look closely you’ll notice that I used a yellow watermelon! I bought it from my local health food store, it’s organic. 

Watermelon Yogurt Pizza
2016-08-29 20:29:32
Print

Ingredients
  1. 1 whole watermelon, sliced down the middle and cut half inch thick*
  2. Sheep’s milk or coconut milk yogurt
  3. Handful of goji berries
  4. Cubed mango
  5. Sunflower seeds
  6. Chia seeds
Instructions
  1. Spread the sheep’s milk yogurt evenly over the watermelon. Top with remaining toppings.
  2. Slice it into pizza triangles once you’ve dressed up the whole thing – just like traditional pizza!
Notes
  1. Garnish with edible flowers! Mums are edible, that’s what I used.
  2. I didn’t use exact amounts because it really depends on the size of your watermelon. Just have fun with it!
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Watermelon Pizza 

The second watermelon pizza is perfect for breakfast because of the oats, bananas and pecans — sounds like granola doesn’t it? I don’t know which I enjoyed more, creating these watermelon pizzas or eating them! The combinations were sweet perfection.

Here’s recipe for my Banana Pecan Watermelon Pizza:

Banana Pecan Watermelon Pizza
2016-08-29 20:35:53
Print

Ingredients
  1. 1 whole watermelon, sliced down the middle and cut half inch thick*
  2. Banana sliced
  3. Handful chopped pecans
  4. Organic oat flakes
  5. Ground cinnamon
  6. Coconut flakes
  7. Raspberries
Instructions
  1. Sprinkle ingredients on top of watermelon. Slice into pizza triangles.
Notes
  1. I didn’t use exact amounts because it really depends on the size of your watermelon. Just have fun with it!
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Watermelon Pizza

These two watermelon pizzas were wonderful — the combo of juicy and fresh, and flavours from the toppings was perfect. You could use any fresh fruit, nuts or seeds you have on hand. You can’t go wrong because many foods pair nicely with watermelon, maybe not cheese though (sorry Walker!). 

If you have little ones, get them involved in putting the toppings on the pizza. Vienna’s first birthday party is this weekend so I’m going to make these watermelon pizzas for her party! I hope my family appreciates this unique use of watermelons haha. :)

Let me know if you make these and please tag me #joyoushealth @joyoushealth on social media so I can see your creations.

Have a joyous week!

Joy 

Joy McCarthy

Joy McCarthy is the vibrant Holistic Nutritionist behind Joyous Health. Author of JOYOUS HEALTH: Eat & Live Well without Dieting, professional speaker, nutrition expert on Global’s Morning Show, Faculty Member at Institute of Holistic Nutrition and co-creator of Eat Well Feel Well. Read more…

 

 

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What’s Wrong With Medicine? You Decide.

I have practiced medicine for over 40 years. I have yet to find a physician without a chronic disease in question who is smarter than the person with that chronic disease. I have been impressed that a patient’s numeric insights and intuitions when they are ill surpass their skills when they were not ill. All a patient needs is information, in all its glory and messiness, to know if the information is worth anything to them when they face a medical decision.  Patients, in my view, are the best information managers and evidence experts I have ever seen, and I know a bunch of evidence experts to draw upon for the comparison. My interpretation may be biased, but I have been doing shared consults with patients for twenty plus years and I have learned that patients are smart. Consider the following:

1. The man had been advised to have surgery. The man and his wife stared in stunned silence at the data on prostate cancer treatment outcomes with surgery. The study was described in detail including a description of the people who were studied. The wife finally spoke, “You mean to tell us you want my husband to have surgery when so few have been studied! You mean to tell us that not a single person of our cultural heritage has been tested in the study?” I responded and reminded, “I am not asking you to have surgery. We are going over information of potential benefit and harm that you must balance for your choice.” They were kind in response, refused to consider surgery or further discussion, and, instead, chose to enter a clinical study.

2. The patient had been advised to have a CT to screen for cancer. He exclaimed, “Let me get this straight. You are saying that out of nearly 55,000 people studied, there were only about 30-80 fewer deaths from lung cancer over nearly 5 years if a low dose computerized scan (LDCT) was done rather than a chest-x-ray?” I replied, ‘’Yes, that is correct. There were, remember, about 100 fewer patients dying of any cause if they received the LDCT rather than the chest-x-ray.

As you also know, alternatively, about 10 extra people getting the LDCT died or got a complication within 60 days of the exam due to the work-up of abnormal findings on the exam. That is your trade-off for having a LDCT; a potential small benefit in the future balanced by a potential small chance of dying or having a severe complication early due to a work-up”.  He replied, “I am not a scientist, but these numbers represent miniscule differences. The study could be wrong. I am not willing to take the LDCT scan based on the data”.

Medical care has been described as a, “philosophy informed by science”.  There is a subtle problem with this view, however. This comment suggests that evidence informs the philosophy of how medical care should be delivered. It may be, however, as others have suggested, that evidence might be produced in biased ways by the prevailing philosophy. If this is true, then we have to sit up straight and reconsider our philosophy of medical care.

So, here is what’s wrong with the present practice of medicine. The totalities of medical care delivery, the cost, the inequality, the profit margins for some and not others, the arguments, and political plotting are meted out by decisions made. Those who make decisions are those who define what the practice is.  The problem with medical care is that physicians decide. This is philosophically dysfunctional. Physicians should not, and should never have, made decisions for their patients. For sure, in an acute situation, acute care experts must make decisions. But, there is no such thing as a physician chronic care decision expert. Only patients are experts. They are the only ones who can know if one option is worth more than another based on the absolute differences engendered by the comparisons and their preferences for said differences.

The patients above compared the options proposed to them and chose in contrast to their physicians’ decisions. These people embodied the appropriate philosophy that medical care is theirs to define. Their idea is the fix for medical care. If physicians followed these patients’ philosophy, physicians could be worthy of being the patient’s partner; if physicians do not, they are doomed to follow a problematic philosophic stance. Trying to fix medical care based on a philosophy that allows physicians to be the decision makers will be like trying to float a sinking battleship with bubble gum. It is impossible to overcome a poor philosophy of care with edicts, ruminations, and patchwork insurance fixes. It is time to rethink the goals of best medical care; patients will tell us what evidence is worthwhile and what their care is worth. It will never work the other way around.

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How I Balance Being an Entrepreneur and a Mama

People ask me all the time how I balance being an entrepreneur while being a mama so this is what my latest video is all about. There are certainly some days when I feel a bit overwhelmed, but I do have strategies to keep me on track with business and mama life. 

Before I share my strategies, a little about me if this is your first time visiting the blog. I have the two best jobs I could ever ask for (in my opinion of course!) — being a mama to Vienna and an entrepreneur. Every day I’m grateful to get to do what I love but it wasn’t always this way. I spent several years in a completely different career which I was miserable doing and over a decade struggling with hormonal imbalance which lead to a whole array of health issues. 

Entrepreneur and Mom-05457

One of my strategies for balance has always been to practice gratitude.

Of course it’s easy to be grateful when things are smooth sailing, but when the sh@#%t hits the fan so to speak, being grateful matters a lot. 

In this video, I also talk about the fact that I schedule everything on my iphone calendar. I LIVE by my calendar. And I write everything down. I’m all about to-do lists. This is my party-planning to do list for Vienna’s first birthday party!

JOYOUS FAMILY

Whether it’s meeting one of my girlfriends for a tea or having a business meeting, it’s in my calendar. If it’s not in my calendar it won’t happen. It also helps that Walker and I share the same calendar so we aware of each other’s schedule. This is essential for us to be successful as parents, business partners and as a couple.   

A big part of balancing everything is also staying on track with my health goals. Healthy is a lifestyle for us, it’s not a part-time seasonal thing — it’s every day. In case you’re looking for some inspo, I filmed a video on how to stay on track with your health goals. 

Having your own business also means wearing many different hats — even though the main part of my job at Joyous Health is recipe development, writing health articles and public speaking, there’s lots of less glamorous stuff I do every day at home and at the office. Whether it’s changing poopy diapers, answering phone calls and emails, I always try and be 100% present. Most important of all the things I do is being present with Vienna. I’m not perfect with this but it’s something I’m always reminding myself to do. 

Entrepreneur and Mom-05459

I share many responsibilities in personal and business life with my hubs Walker. Before Walker quit his full time corporate job to join Joyous Health, he was helping out a lot behind the scenes. It was hard at first for me to accept any help because I’d been doing it by myself for so long, but everything changed when we worked together as a team.

As I talked about in my video, I know that it takes more than one person to raise a child and to make a successful business happen. Walker is an incredible dad to Vienna and I really couldn’t ask for a better business partner. He’s my photographer (he takes ALL the amazing food photos), videographer, video editor, new business manager and does so much more. He is one half of Joyous Health! 

Whether your a busy mama or not, I hope my video gives you some good tips for managing balance between life and work. Remember you don’t need to strive for perfection because quite honestly, some of my greatest accomplishments have happened when I wasn’t perfectly balanced and I’m okay with this. The point is to always get back on track as soon as you realize you’ve fallen out of balance. 

If you’ve got any great tips, please do share below.

Wishing you a joyous week!

Joy

Joy McCarthy

Joy McCarthy is the vibrant Holistic Nutritionist behind Joyous Health. Author of JOYOUS HEALTH: Eat & Live Well without Dieting, professional speaker, nutrition expert on Global’s Morning Show, Faculty Member at Institute of Holistic Nutrition and co-creator of Eat Well Feel Well. Read more…

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EpiPen Shock

The white hot EpiPen controversy is the latest signal—and it should be loud and clear at this point—that the pharmaceutical marketplace is dysfunctional.

To be sure, drug companies make medicines that save and prolong lives and ease suffering. And many drugs save money compared to alternative treatments, and yield productivity gains by keeping people alive, well, and working.

But over the past two decades, the industry has become the poster child for poor business ethics, flaunting the law, and profiteering. Just one example: Since 1990 drug companies have paid $15 billion in civil and criminal fines to the federal government for promoting the use of their products “off-label” – that is, for unapproved uses.

They have also been caught red-handed (a) testing drugs in illegal and unethical ways in third world countries, and (b) hiding study results from authorities worldwide that undermine claims for their drugs’ effectiveness and/or safety.

Most recently, they have been vilified for startling increases in the prices of both brand-name and generic drugs.

EpiPen, made by Mylan Pharmaceuticals, is the latest. Thanks go to analysts at Well Fargo who brought to light the product’s steady year-over-year price rise (for a two-pack) from $165 in May 2011 to $608 in May 2016.

Mylan’s CEO Heather Bresch has reacted aggressively to tamp down the public and media uproar, and in fairness she’s not another Martin Shkreli, the infamous former head of Turing Pharmaceuticals who smirked his way through a congressional hearing on the companies 5000% increase of a generic drug that cost pennies to make. Nor does she seem to be in the mode of pharma villain Michael Pearson, former head of Valeant Pharmaceuticals. According to a revealing and detailed piece in Vanity Fair (June 2016) by Bethany McLean, Pearson pioneered a new form of “drug dealing” and made a high art form out of price gouging before he was forced out.

No, Bresch and Mylan are more in the main stream, and that’s the problem. In recent days she has justified the EpiPen price increases by arguing that: (1) she had to do it to recoup legitimate investment costs; (2) Mylan gets only $274 of that $608 list price with the rest going to insurers, pharmacy benefit managers, and other middlemen, because of (her words) “an outdated, inefficient system;” and (3) “It was never intended that a consumer — the patient — would be paying this price” (as she told CNBC) and they are paying more, Bresch said, because insurers have hiked insurance deductibles and drug co-pays so significantly in recent years.

Bresch makes some valid points. But much of her explanation and response is disingenuous and spotlights the problems with the pharma industry as well as the way we price and pay for drugs in the U.S.

First, what’s the justification for even doubling the price? There can be none other than the desire for more profit. The drug (epinephrine/adrenalin) as well as the type of delivery mechanism EpiPen uses has been on the market for decades. Mylan acquired EpiPen in 2007 when sales were $170 million. EpiPen sales in 2015 were $1.7 billion.

The real explanation, which Bresch didn’t acknowledge, is that her product has a near monopoly (more on that below). So Mylan could raise the price without fear of market share loss. In fact, Mylan has a quasi state-sanctioned monopoly since 11 states require schools to have injectable epinephrine products on hand, in part as a result of Mylan’s lobbying. And a 2013 federal law—the School Access to Emergency Epinephrine Act—gives financial incentives to states to enact mandates for schools to stock epinephrine autoinjectors and train personnel to administer them.

That’s actually a good law because the need is justified, but the problem is there’s only one viable product now. In fairness, according to a Washington Post story, Mylan gives EpiPen free to many schools.

Not incidental to its market lock and profitability (and the cumulative cost to buyers over time), EpiPens have a shelf life of just 1 year.

Second, Bresch’s statement that “the consumer was never meant to pay” for EpiPens betrays a broad pharma approach to the marketplace. Since the consumer is insulated from out-of-pocket costs, let’s get what we can from insurers and government.   Well, everybody is doing that so what’s the problem? The problem is that Bresch and every other pharma CEO (and healthcare CEO in general) knows that in the end, WE PAY. In higher premiums, taxes, deductibles, co-pays etc. It’s that simple.

Bresch says she know that, believes “the system is broken,” and is ready to work with Congress to fix it.

She could have started by immediately lowering EpiPen’s price. She declined to do so. Instead, she adopted the tried and true pharma approach of reducing consumer’s out-of-pocket costs for EpiPen. Mylan will increase the amount of money on a copay assistance card from $100 to $300 and will widen eligibility for that assistance program. Per the above explanation, that’s not in any way a savings to the system or in the long run, consumers.

As for Bresch’s explanation that Mylan gets only $274 of that $608 list price with the rest going to insurers, pharmacy benefit managers, and other middlemen, there’s no way to know if those numbers are correct. Why? Because the system is opaque, and she knows that. Knowing a bit about this marketplace, I doubt seriously that PBMs are pocketing $200 or more per EpiPen two-pack.

The system is also broken is ways Bresche didn’t directly address this past week.  EpiPen has a monopoly in large part because the FDA did not help competitors stay in the market or get to market to compete with it.

As reported by Dana Goldman, a professor at the University of Southern California, in the online news service STAT, FDA failed to work with Sanofi Pharmaceuticals in 2015 and this year to get a competitor to EpiPen back on the market after it was recalled in 2015 because of 26 adverse event reports. The device in those cases was found to be delivering too much or too little drug. But Goldman says no one died and the failure rate, based on sales of 2.8 million units, was just 0.01 percent.

Instead of working with Sanofi to keep it in the game, FDA dawdled as Mylan’s market grew rapidly, Goldman says. In addition, this past spring FDA rejected an EpiPen copycat made by Teva. Five senators wrote the FDA on August 25 expressing concerns the agency may have stifled competition.

This is consistent with complaints by lawmakers, consumer advocates and others over the last few years that the FDA does not approve generics fast enough, nor pay enough attention to situations in which a single product—brand or generic—lacks viable competition and starts to become excessively expensive. The FDA defends itself, claiming its only job is to make sure drugs are effective and safe, not affordably priced. Consumer advocate pooh-pooh that, arguing that FDA has a long-standing mandate from Congress to approve competing brands and generics quickly.

Two final notes:

(1) Mylan’s price hike for EpiPen is not an aberration. It just garnered the most attention. The company has made price hikes on dozens of medications.

(2) Bresch’s compensation has risen at the same rate as EpiPen’s price, roughly six fold since 2007, to $19 million in 2015.

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A Warning Label For Healthcare E-mail?

Eric Jones, the CEO of a large hospital, is at the end of a long day.  It’s 10 PM, he’s very tired, and has had his maximum of three drinks.  He’s checking his emails and sees one from Ralph Smith, CEO of a small community hospital, rejecting Jones’ offer to joint venture hips and knees.  The small hospital has rated tops in those categories, and Jones had hoped to achieve a quality and marketing coup by joining forces, perhaps as a prelude to acquisition.  This rejection was the last straw, particularly since Smith and Jones never had gotten on very well.  Immediately, Jones whipped off an email excoriating and libeling Smith and his hospital, misrepresenting what happened in negotiations, and threatening to “go to war” and “destroy” him and his hospital if they don’t “play ball.”

Think that far-fetched?  Nope.  Things worse than that have happened with astonishing regularity.  Assume that when Smith opens and reads that email the next morning, he then forwards it to his senior staff and the hospital’s litigation lawyer.  The lawyer confirms that it’s not only actionable for libel, but could constitute a violation of antitrust law, where damages can be trebled and attorneys’ fees recovered.

Then one of the small hospital’s senior staff decides to forward the email “without attribution” to one of his friends who is a local investigative reporter.  Two mornings later, the email, in its entirety with only obscenities deleted, appears above the fold on page one of the local newspaper, and a summary, with several choice quoted sentences, are run on local TV and radio news, just below a terribly unflattering photo of Eric Jones.

At that point, would you like to be Eric Jones?  Would you like to face his board of directors?  And the coming lawsuits, talk show commentary, blogs, etc.? Dust off the resume Eric.

We all use email.  Some 90% of Americans do today.  Some misuse it famously, as we see in the election cycle press every day, and with predictable results.  Because email IS different.  It’s not the same as a face to face discussion, or even a phone call.

Clearly, the ubiquitous use of email has blinded many of us to its dangers.  Accordingly, the purpose of this piece is to discuss some of those dangers via do’s and don’ts.  And for sure, healthcare is particularly apt for caution given that unauthorized disclosure of personally identifiable confidential healthcare information brings with it an avalanche of very nasty consequences.

Let’s first consider everyday business use of emails.  We start with the “10PM Rule.”  The 10PM Rule says: “Never, ever, send a confrontational or angry email after 10PM.  Ever.”   If it’s a really bad one, they’ll assume you were drinking or worse.  At best, you exercised poor judgment because you were tired and cranky, not exactly inspiring confidence either.  It even has a name:  “email flaming.”

Truth is you should try to avoid sending any confrontational emails.  Yet so many people avoid confrontations by using confrontational email as a substitute.  Face to face is so much better for more reasons than we have space to write. And once the email is sent, the recipient feels she MUST respond, usually in kind, to “set the record straight.”  And there is now a “record” for the world to see if it really wants to.

The temptation to copy others must be avoided.  Don’t make more of a spectacle out of yourself than you just did.  You’ve just turned what should have been a private discussion into a public washing of the dirty laundry.  Don’t make it worse.  Moreover, emails too often get missent, or miscopied; and those who were erroneously copied just love forwarding something juicy to their 50 best friends, and it becomes, how do we say, viral.  All a bad email needs is a single recipient who wants to do you harm by forwarding it to your regulator, your enemy, your competitor, your boss, or your spouse.

Arguments by email are the height of inefficiency.  Write, respond, write, respond, claim, counterclaim, and never resolve.  Tit for tat.  And, email is decidedly NOT the medium for extended discussion of complex issues.

And extremely important:  email causes misunderstanding all too often.  One does not see the sender’s face, expressions, and gestures, nor hear the tone of voice which is so important.  Tone, emphasis, and meaning count for much in communication.  A surprisingly high percentage of face to face communication comes from nonverbal, well over 50%.

And what about labelling it “confidential” or some such?  Meh.  That almost ensures it will catch someone’s eye or end up in the absolutely wrong person’s in box.  It also is one of the best ways to unintentionally waive the attorney client privilege if sent to the wrong person.

Emails never die and can always be retrieved, even if you’ve deleted them and your history, and crushed your computer with a sledgehammer.  Never die, get that?  Servers somehow retain them, despite best efforts to make them go away.  We also are reading all about that in the news during this election year.

So what do you do?  Try the following:

Avoid using email for:

  • Confrontations
  • Slurs or socially unacceptable commentary
  • Judgmental commentary
  • Jokes of any kind (I really mean this one)
  • Confidential or sensitive business information, or privileged information, unless as advised by your attorney
  • Write your emails with minimum use of adjectives and adverbs—stay factual
  • Never, never use military or sports terms to juice up your point (in my organization, that was a CLM (Career Limiting Move)
  • Write your email as if it WILL IN FACT somehow end up in the hands of your competitor, enemy, or the local newspaper, or Facebook
  • Oh, speaking of Facebook, avoid business or sensitive personal communications there at all costs

If you have any doubts after drafting an email:

Keep it in draft and wait a day to reread it.  Your judgment might have improved.

Triple check that it is going to the right person and only that person.  Those chain emails have a nasty way of going to everyone despite your best effort to limit it to just one person.  I’ve been embarrassed in exactly that way.

Physician use of email can enhance communication with patients AND improve care.  After all, almost all Americans use and rely on email today as their primary communication tool.  But it’s tricky.  Many payors do not yet reimburse physicians for emails, so it’s not exactly a revenue driver, yet. But leave that aside.  If physicians decide they will use email because it enhances the relationship and the level of communication, they should consider the various legal and other risks and take the necessary steps to lessen those risks.

Patients who wish to communicate with their physician via email should be informed of the risks and sign a document whereby they assume risks inherent in email.  It would be well to seek legal advice for particular federal or state legal requirements or prohibitions.  State statutes on confidential healthcare information protection vary widely.  And there are HIPAA and HITECH, etc.

Note also that under HITECH, physicians are required to provide patients access to their information in the form and format requested by the patient.  That may well be electronically by email.  “Reasonable safeguards” must be in place to protect electronic transmission of such information.  So emails probably cannot be completely avoided.

As we’ve seen, it is impossible to absolutely guarantee the security and privacy of email.  Thus, all you can do is minimize the risks as much as you can.  Check for applicable guidelines (e.g., AMA).  Internal process should be adopted incorporating such guidelines.  If the practice has its own website, a secure website portal should be considered as the way to email.  Encryption also helps, but both parties must be able to use the encryption.

To summarize:  electronic communications can be wonderfully efficient, speedy, and practical in all sorts of contexts, including healthcare.  But please understand the risks inherent in its use, and take the common sense steps to protect yourself and others.

 

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Hold on. Ready For It? EpiPen May Actually Still Be Too Cheap!!!

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Pick up a newspaper or surf the web and you’ll find story after story taking Mylan to task for EpiPen pricing practices. The list price of a 2-pack has soared from about $100 to $600 over the past decade. The price is deemed too high and the rate of increase is considered particularly unconscionable.

Let me offer a brief counterargument:

EpiPen is worth the price. A $300 pen regularly rescues children from anaphylactic shock that would otherwise be fatal, offering them the chance to live to 100 instead of dying at 10. (About 20% of patients need a second dose, which is why these devices are sold in 2-packs.) Meanwhile drug makers charge hundreds of thousands of dollars per year per hemophiliac, tens of thousands or more to give a cancer patient a shot at a couple or few more months of life, and thousands per year to modestly lower the chance of a heart attack. Within that context, and in absolute terms, EpiPen is indeed a bargain.

People are complaining that they pay hundreds of dollars per year –or more if they have multiple packs– for something they hope never to use. But they should acknowledge that they are actually using EpiPen even when they never dispense the drug. EpiPen is what lets them send their children on playdates and be comfortable with them away at school and summer camp, go out to restaurants, and take hikes in the woods.

EpiPen is worth a lot more than its current and former competitors. According to the Washington Post, Twinject left the market in 2012 and was considered clumsy and unappealing compared to EpiPen. Auvi-Q was recalled last year because it could administer the wrong dose. Teva’s autoinjector was rejected by FDA this year for “major deficiencies.” How many parents would be willing to trade down to save a few dollars on these? Anybody?

The failure of Adrenaclick to catch on despite a lower price, distribution through Walmart and a good review from Consumer Reports demonstrates that Mylan has done a lot with EpiPen over the past decade to earn its price premium and high market share. In particular, EpiPens are now close to ubiquitous in schools thanks to clever marketing, effective lobbying, and public health campaigns. School nurses know how to use them, babysitters know how, and so do siblings. When an emergency strikes and seconds count, the familiar tools are at hand, and people are ready to act. It doesn’t really feel like the moment to learn about Adrenaclick for the first time!

In effect, Mylan has created a public health support system around EpiPen. I’ll go ahead and make myself even more unpopular by saying that this system justifies the big price increases. When you buy EpiPen in 2016 you’re not just getting the product like you were in 2007, you’re benefiting from the whole system. Although the product itself hasn’t changed, EpiPen is more valuable now than it used to be, and Mylan has justifiably reaped the rewards.

EpiPen is far from perfect. For example, it needs to be stored within a tight temperature range and protected from light.  The pens have to be replaced annually. Other companies are working on EpiPen alternatives, and I’d like them to have a financial incentive to do so. A cheaper EpiPen could be nice, but I’d rather see something that’s better (easier to use, more effective, more stable), even if the price is higher. The current attacks on EpiPen are unfortunate because they discourage investment in these types of innovation.

Before you dismiss these arguments and call me an industry hack, I’ll point out that I have advocated for drug price regulation since 2006. But EpiPen is not the place for the government to intervene.

David E. Williams is a health care consultant and blogs at The Health Business Blog.

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