ACO Winners and Losers: A Quick Take

By ASHISH JHA, MD

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:

NEW ACO RESULTS: physicians are changing care, w better results for patients & are saving money. Over $1B. https://t.co/FEfe3QErb5

— Andy Slavitt (@ASlavitt) August 25, 2016

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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:

@RahulRajkumar11 @ashishkjha open data is now the default in government 🙂https://t.co/LyXWJzU5lZ

— Aneesh Chopra (@aneeshchopra) August 26, 2016

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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. 

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! 

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

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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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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

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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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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.

By ROBERT McNUTT, MD

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. 

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!

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. 

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

By STEVEN FINDLAY

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?

BY JIM PURCELL

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!!!

By DAVID E. WILLIAMS

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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The Self-Care Rx

BY LEONARD KISH

“The system only changes if we empower the one person who cares about their health the most – the patient. Over the next decade, I believe people will become the CEOs of their own health.” Vinod Khosla

Self care is the future for the simple reason that nobody wants to be a patient. Of course we want care when we need it. We want to be well. We want a good life. We want independence. We want control, and we certainly don’t want to need care nor to lose control.

And becoming a patient, for better or for worse, implies giving up control. Being a patient implies there are gatekeepers, there are limits, there are constraints, there are decisions we can’t make for ourselves. We can’t always get the access we want. Talk to patient advocates and you’ll find people fed up with the lack of control, lack of ownership and the lack of help from the health care system.

While we won’t ever get all the care we need from patient groups and new digital self care tools, we’ll always need professionals to make decisions that are deeply complex and require a deep understanding, there’s still a great deal we can get from our peers and our new tools and the list is growing every day. Many conditions simply don’t need deep expertise, they only need to answer “what do I do next?” around a condition.

The desire for action and control drives our internal motivation, but, along with them, there are now also strong technological and societal forces driving an emerging self care movement.

Here are the major forces at work:

1. Internet of Things (IoT): Sensor costs are becoming very inexpensive. They will become commoditized. Telemedicine is growing, and, as payment aligns with outcomes, it will be routine. In 5 or 10 years, in a non-emergency situation, why will we need to go to a “bricks and mortar clinic”?

You may need to get a scan, or you may need a real physical exam, but less so every year. The world of medicine become more and more digital every day as measurements are enabled for the consumer. Philips recently made the move in the wearable marketplace from fitness to chronic disease, with a $600 system including a watch, scale, BP monitor and thermometer.  This is a big step, and foreshadows a self-tracking future for healthcare. More sensors are surely on their way to the home and mobile.

2. Shifting Risk: Patients and self-insured employers are looking for new ways to minimize their financial risks as plans move toward high deductibles and employers are looking for new ways to keep employees healthy and happy and looking for new measurements. It’s historically been very expensive to get data on populations, and even more difficult for data around individuals. For individuals and employers, to bend the cost curve, they need the best information available on what costs will be and how behavior affects costs and disease risk.

Say someone is diagnosed with pre-Diabetes. How much will will he have to pay for those Diabetes meds if he gets full-blown diabetes? Will he have to get daily insulin injections? When risk is personal, we can start to change outcomes and drive engagement. While some health is measured and influenced at the population level, including social determinants, health is still driven by individual decisions on a daily basis. We are driving toward individual risks as we get better at measuring. This will have big implications for insurers in the not-to distant future, and for individual rights as well. As we gather more information, when we get to very accurate predictions of risk for an individual. What will population-based insurance look like with all this information? We all need the right information to make our own decision on our financial and health futures. Laws governing individual risk will likely change as well.

3. Interoperability around the individual. It’s been a long time coming, but the recognition that patients must be the means by which health data is transferred is coming into the mainstream.

CIOs have indicated that relying on institutions, institutions that have neither the rights nor the incentives, to share health data might not be the right approach.

According to Dr. David Kibbe of DirectTrust,

“The real issue involves who owns the health information that is created by you and me, and about you and me, and who has the rights to view it, access it, use it, download it and move it around.”

Kibbe went on to say, ““We need a new and different national, maybe international, dialogue about how health data and information are centralized and de-centralized, about how to assure its privacy, about the use of encryption for security and about identity assurance,” Kibbe added. “Some of this is policy and some of this is social science.”

Kibbe gets it right on decentralization: decentralized technologies are allowing individuals the ability to track the information about themselves without a third party. Blockchain is being hailed as user-centric data store. Just as bitcoin is showing the promise of de-institutionalizing banks to protocols and distributed data stores, blockchain shows promise for other kinds of individual-centric data.

Don and Alex Tapscott have written “The Blockchain Revolution” which details how blockchain and related technologies will weave their way into many industries, driving decentralization of many currently centralized processes.This could be a core part of moving health data exchange to a truly individual-centric system. Bruce Boussard, the CEO of Humana recently confirmed this perspective, saying: “The promise of Blockchain is about putting the consumer at the center of health care, instead of the other way around.”

While Kibbe’s comments above were on the care delivery side of health care, big changes will be impacted on the research side of things as well. Eric Topol and John Wilbanks highlight in a recent Nature article that, even if we have easily given up personal data rights around commerce, we need to draw the line on the privatization of personal data around health data. Just as we control our own bodies, so must we control data about our bodies and minds.

4. Precision medicine. Precision medicine is information science, population health, value-based care and patient experience driven to the level of the individual. Although we tend to think of individual and population health as opposite sides of the same spectrum, precision medicine is the path we’ll follow to get to all the others. Take a look at the recent award for Scripps to understand Precision Medicine:

“This range of information at the scale of 1 million people from all walks of life will be an unprecedented resource for researchers working to understand all of the factors that influence health and disease,” NIH Director Dr. Francis Collins said in a statement. “Over time, data provided by participants will help us answer important health questions, such as why some people with elevated genetic and environmental risk factors for disease still manage to maintain good health, and how people suffering from a chronic illness can maintain the highest possible quality of life. The more we understand about individual differences, the better able we will be to effectively prevent and treat illness.”

Providing the right care to the right individual requires a complete picture of that individual. Precision medicine is the the nexus of the combining forces of medicine becoming and information science while being directed to the unique contexts of a person’s lifestyle and genomics.

In June, Healthcare IT News and HIMSS released a study and the headline, “Hospitals rank population health, value-based care, patient experience as top strategic drivers of precision medicine.” The first part is perhaps not that surprising, but what’s been missing is how tightly related population health, value-based care and patient experience are to each other, and they are all going to be accelerated with precision medicine. Precision medicine has the ability to become the medical science of how to do better care at lower cost and create a better experience for each individual. It has the potential to become the science of value-based care. The more we customize treatments, the better we can manage populations, it’s not unlike the idea of mass customization in retail.

5. Volume to value is becoming ingrained in the health system. By this time, just about every pharma company either has or is thinking about putting together a patient engagement strategy. Part of this is driven by the success of Direct to Consumer Advertising and a desire to extend it, but the other part is that patients are a wealth of valuable information that can now be accessed for research and insight into disease and patients’ experience with their disease.. There’s a lot to learn at every step of the pharma value chain. Payers and providers are a bit slower to change, but, with value-based payments forcing movement, it’s coming.

6. Self care is what people want. Finally, as discussed in the beginning. Nobody wants to be a patient. We want independence. The horrible experiences and the overall lack of access, all driven by the insane economics of health care, are driving people away from the current health system and towards personal choice and self care with new tools and new communities. People want to be well far more than they care how they get there. There will always be a role for the professionals, be we have to offload as much as possible. The core unit of value in healthcare is the right decision. It doesn’t matter how the decision is made as long as it is correct.

7. It’s the right thing to do. Patient engagement and personal empowerment with information means better outcomes. People actively engaged do better. It’s simple, but powerful. When people have data they feel better, errors can be found, and outcomes improve. Self care is the natural end game.

Independence in care is  a huge improvement to care. It’s not a cure, it’s not a fix all, but ask any patient what they hate the most about the health system, and they’ll often mention a loss of control. When we can feel like we are in control of our illness and recovery without a forced dependency for many simple conditions, it’s a big part of the battle.

Quick plug on self care: Interested in exploring self care further? There will be a panel hosted by Dell Medical School and a workshop I’ll be hosting with Self Care Catalysts (where I’m a Senior Advisor).  Please vote early and often!

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Open Letter to President Obama About His JAMA Paper

KIP SULLIVAN, JD

Dear President Obama,

If I were to tell you that alligators and southern accents are correlated and that alligators cause southern accents, what would you say? You’d say, “Yes, Kip, there is a correlation, but it’s weak. But more importantly, even if the correlation were strong, there is no plausible mechanism by which alligators could influence accents. Therefore I reject your conclusion.”

I offer the same rejoinder to your argument in your August 2 JAMA article  that the Affordable Care Act has reduced health care inflation. In that paper, you claimed the ACA has “contributed to a sustained period of slow growth in per-enrollee health care spending,” and you cited the low average inflation rate of the five-year period 2010 to 2014. But that period correlates only loosely with the period of very low inflation that began in 2008 and ended in 2014. The fit is even worse if we define the “sustained period of slow growth” as 2004 or 2005 to 2014 as some do. To give you the benefit of the doubt, I’ll assume you were referring to the 2008-2013 inflation lull.

Of far more importance, even if the correlation were strong, there is no plausible mechanism in the ACA that could have caused more than a tiny fraction of the 2008-2013 slowdown.

Your post-presidency sabbatical

The purpose of this letter is to urge you to find the time after you leave office to discover for yourself there is no cost containment in the ACA for the non-Medicare population and very little for the Medicare program, and the net effect of the ACA on national health spending is inflationary, not deflationary. If the ACA’s so-called cost-containment provisions don’t cut costs (or even raise costs when all costs are measured), but the ACA raises inflation by expanding coverage, its net effect has to be inflationary.

You of all people need to acknowledge that fact and do something about it. Your name will forever be tied with the ACA. The ACA has never been on a solid footing, and now that inflation is resuming, it should be clear even to you and other diehard ACA supporters the ACA is in trouble. If nothing changes, the ACA could become what Henry Aaron predicted in 2010 it might become – “zombie legislation, a program that lives on but works badly.”

Just because you’re leaving office doesn’t mean you must sit on the sidelines and watch the ACA take a slow nose dive. If you set aside some time after you leave office to immerse yourself in health policy, and if you give high priority to finding the truth and low priority to making the ACA look good, you will conclude as I have that the ACA has little cost containment in it. You’ll conclude, as I have, that Peter Orszag, Zeke Emanuel, Jeanne Lambrew and the other advisors who told you “accountable care organizations” and other pay-for-performance fads could cut costs were merely regurgitating groupthink developed over the last half-century by the managed care movement.

And once you have determined that ACOs and the other cost-containment nostrums in the ACA are not lowering inflation and some (notably ACOs and “medical homes”) may actually be inflationary, you can then use your influence to educate Congress and the health policy elite about why the ACA is aggravating inflation and what should be done about it.

In this letter and two comments I’ll post shortly, I will offer a quick tutorial on where you went wrong in claiming the ACA is anti-inflationary. Obviously I don’t have the space here to teach a graduate course in health policy. But I do believe that in three essays I can make you suspicious of the groupthink you were exposed to in the White House, and I believe I can whet your appetite for the antidote to groupthink – evidence-based health policy.

It’s the economy, stupid!

There is near-universal consensus that the 2008-2013 inflation lull began in 2008 because that was the first full year of the Great Recession, and the lull ended in 2014 because the recession’s worst effects were over by then and because the most inflationary provisions of the ACA – the coverage expansion provisions – kicked in that year. Other factors contributed to the lull, but the recession was far and away the most important.

The latest report on the National Health Expenditure Accounts, a document you cited four times in your paper, makes it crystal clear the inflation lull came to a halt in 2014. Here is the very first sentence in the summary of that report:

“In 2014, U.S. health care spending increased 5.3 percent following growth of 2.9 percent in 2013 to reach $3.0 trillion…. The faster growth experienced in 2014 was primarily due to the major coverage expansions under the Affordable Care Act, particularly for Medicaid and private health insurance.” [1]

How did you miss that statement? Inflation almost doubled in 2014 primarily because of the ACA. Inflation is projected to rise gradually to 6 percent by 2020

Why did you fail to tell us the “sustained period of slow growth” ended two years ago?

There is widespread agreement that the enormous loss of income and wealth caused by the 2007-2009 Great Recession is the most important reason why the inflation lull began and ended when it did. The reason for that is the existence of a well-documented correlation you neglected to mention – a consistent correlation over time, over space, and over income classes between income and health care spending. Richer nations spend more on health care than poorer nations; upper-income Americans spend more on health care than lower-income Americans; and Americans as a group spend more on health care during good times and less in bad times.

To put that last point more precisely, we spend less during periods that include recessions and recovery from recessions, and we spend more during periods following recovery from recessions. Because the Great Recession was brutal (it was the worst recession since the Great Depression), its effect on medical spending was immediate and its effect lasted beyond 2009.

Perhaps the single best paper documenting the tight link between the recession and the inflation lull is one by Dranove et al.  entitled, “Health spending slowdown is mostly due to economic factors, not structural change in the health care sector.” Your former advisor Peter Orszag cited that paper in his editorial commenting on your paper.

Alligators don’t cause accents

The correlation between recessions and health care inflation is not only consistent over many years and reasonably tight, but it has a plausible explanation. Conversely, the correlation you asked us to accept (the 2008-2013 inflation lull and the short lifespan of the ACA) is loose and, with one possible exception that I will discuss and dismiss below, has no plausible explanation.

The explanation for the correlation between recessions and health care inflation is not just plausible, it is obvious. Medical care is expensive (it accounts for a sixth of our Gross Domestic Product) and much of it can and will be put off when more basic needs like food and shelter become harder to pay for. Conversely, when most households have recovered from recessions, national spending on health care returns to levels approximating pre-recession levels. By contrast, with one remotely possible exception (the cuts to Medicare), your claim that there is something in the ACA that would explain the last four years of the inflation lull (2010-2013) defies commonsense.

I urge you to read the annual reports on national health spending during the post-2010 portion of the inflation lull by CMS’s Office of the Actuary (OACT). You’ll see that OACT gave the ACA virtually no credit for the inflation lull and instead attributed the lull to the Great Recession. For example, in a paper  on national health expenditures for 2011, OACT stated: “Although some provisions of the Patient Protection and Affordable Care Act … were in effect in 2010 and 2011, the impact on aggregate health spending growth was minimal in these years. The most prominent provisions of the act will not be implemented until 2014.”

In its report on national expenditures for 2013 ,OACT again attributed the continued low inflation to the recession. OACT mentioned the ACA only in passing, and then merely to say that the ACA contained inflationary and deflationary provisions. [2] Of the four deflationary provisions OACT mentioned, only two – the cuts in Medicare’s FFS program and in the Medicare Advantage program – constitute remotely plausible mechanisms by which the ACA could have made a dent in inflation during the 2010-2013 period. But upon examination, those cuts do not constitute a plausible mechanism because they did not take effect until 2012, and they did not become substantial until 2014. [3] To repeat, by 2014 the inflation lull was over.

To your credit, you did not attempt to argue in your JAMA paper that ACOs and other “alternative payment model” (APM) programs authorized for Medicare by the ACA should take any credit for the inflation lull. That would have been foolish for two reasons. First, like the cuts to Medicare, the APM demonstrations weren’t implemented till late in the 2008-2013 period. Second, those demos are saving little or no money and may be raising costs when all costs incurred by all payers (doctors, hospitals, foundations, and public and private insurers) are taken into account.

For the record, the Medicare inflation lull ended in 2014 as abruptly as the system-wide inflation lull ended. [4] Medicare inflation resumed in 2014 despite the big cuts inflicted on Medicare by the ACA and the 2011 sequestration legislation.

Electronic medical records: An overlooked cause of inflation

Oddly, you made no mention of electronic medical records (EMRs) as a mechanism that deserves credit for the inflation lull. You have been a huge fan of EMRs. You believed the folklore promoted by the Institute of Medicine and the computer industry that EMRs would cut medical costs by more than the EMRs cost to install and maintain. Because you believed that folklore, you enthusiastically supported legislation (the HITECH Act, the ACA, and MACRA) that put financial pressure on doctors and hospitals to buy EMRs.

The evidence indicates that the campaign to induce doctors and hospitals to buy EMRs (which began under Bush II) has raised total health care spending. A paper published in 2005 concluded that the cost of installing EMRs in all hospitals and clinics will raise national health expenditures by 2 percent. [5] Not every clinic and hospital has purchased one of the clunky EMRs available for sale these days, so we can’t say the cost of buying and maintaining EMRs has reached 2 percent of our $3 trillion health care bill yet. But we’re getting there. By 2013, according to the CDC, eight in ten clinics and six in ten hospitals had purchased an EMR. Meanwhile, the evidence indicates EMRs are not cutting costs. We may conclude, therefore, that the ACA has contributed to health care inflation by putting pressure on doctors and hospitals to buy EMRs.

Please note I do not dispute those portions of your JAMA paper which argued that the uninsured rate has fallen and that millions of Americans have access to medical care they didn’t have before. I have focused on your cost-containment claims in order to make it clear to you the ACA will never “bend the cost curve.” If it can’t reduce health care inflation, it is unlikely any Congress, even a Congress consisting of 100 percent Democrats, will ever raise taxes high enough to maintain the lower uninsured rate the ACA has achieved to date. I want you to understand the ACA is headed toward “zombie-law” status unless ACA proponents get it through your heads that the ACA’s faddish “value-based purchasing” nostrums will have little or no effect on health care inflation and might even make it worse.

Analyzing the bad advice you got

I believe you cling to the myth that the ACA deserves substantial credit for the inflation lull, and you cling to the hope that the ACA will lower health care inflation in the future, because you bought the wrong diagnosis of the US health care crisis. You bought the diagnosis peddled by the managed care movement since 1970, namely, that US health care costs are high because patients get too much medical care, and this alleged overuse problem is in turn caused by the fee-for-service method of payment. Having bought this diagnosis, you naturally bought the “solution” proposed by the managed care movement – the fee-for-service incentive must be turned upside down by exposing doctors and hospitals to insurance risk, and doctors must be micro-managed. That diagnosis is wrong, and so is the solution.

In my next two posts I will criticize both the managed care diagnosis (overuse) and the managed care solution (risk-shifting and micro-management). I will do so by focusing on three managed care proponents who influenced you deeply: Atul Gawande, Elliot Fisher and his colleagues at the Dartmouth Atlas, and Peter Orszag. If I can show you how they misled you, I believe you’ll be more open to my argument that the ACA is inflationary.

As you can tell, I really don’t like your health policy. But I want you to know I voted for you twice, and I have great respect for you. Thank you for being our president in such tumultuous times.

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Pretty Up your Plate with Edible Flowers

I had a super joyous morning today because I got to help the hosts of Your Morning christen their new show’s new kitchen!

Since it’s basically the television equivalent of a housewarming, I brought the traditional housewarming gift of flowers, but these flowers had a joyous twist: they were all edible!

Edible flowers are a great way to turn a ho-hum salad into something really special. Check out the video of my segment below for my favourite edible blooms.

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Even if they don’t end up on your plate, plants have lots of other benefits, too. Check out my video on the benefits of indoor plants for more reasons to bring plants into your home. Just remember to always triple-check before deciding whether a plant is safe to eat!

Have you tried edible flowers? Share your stories of floral nutrition with me in the comments below!

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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