Medicare Part D Privatization “Has Succeeded”

 

The author of the commentary excerpted below, won the Nobel Prize in economics in 2000. 

 

Last year, Medicare underwent a major expansion with the addition of Part D prescription drug coverage. A controversial feature of this new program was its organization as a market in which consumers could choose among various plans offered competitively by different insurers and HMOs, rather than the single-payer, single-product model used elsewhere in the Medicare system. Proponents of this design touted the choices it would offer consumers, and the benefits of competition for product quality and cost; opponents objected that consumers would be overwhelmed by the complexity of the market, and that it was unnecessarily generous to pharmaceutical and insurance companies.

Part D is a massive social experiment on the ability of a privatized market to deliver social services effectively. With the support of the National Institute on Aging, my research group has monitored consumer choices and outcomes from the new Part D market.  . . .

. . .

My overall conclusion is that, so far, the Part D program has succeeded in getting affordable prescription drugs to the senior population. Its privatized structure has not been a significant impediment to delivery of these services. Competition among insurers seems to have been effective in keeping a lid on costs, and assuring reasonable quality control. We do not have an experiment in which we can determine whether a single-product system could have done as well, or better, along these dimensions, but I think it is reasonable to say that the Part D market has performed as well as its partisans hoped, and far better than its detractors expected.

 

For the full commentary, see: 

DANIEL L. MCFADDEN.  "A Dog’s Breakfast."  The Wall Street Journal  (Fri., February 16, 2007):  A15.

(Note:  ellipses added.)

 

DNA Scientist-Entrepreneur Venter at Sea

VenterSeaMap.jpg   The projected path of Venter’s Sorcerer II ship in collecting sea organisms.  Source of map:  http://scrippsnews.ucsd.edu/Releases/?releaseID=706

 

Craig Venter’s private gene-sequencing effort beat the government’s effort.  His new research is being funded by a $24.5 million private grant from the Gordon and Betty Moore Foundation.  (For more information beyond the WSJ article excerpted below, see the Scripps Institution of Oceanography press release.)

 

(p. B1)  Marine microbes are among the most abundant life form on the planet and among the most mysterious. Now, results from the first phase of a global expedition are expected to provide a glimpse into this long-hidden world while potentially leading to new drugs and even fighting climate change.

Craig Venter, the brash biologist who helped crack the human genome seven years ago, says he and other scientists have used DNA-analysis techniques to discover millions of new genes and thousands of new proteins in ocean microbes. These microscopic life forms are mainly bacteria and organisms known as archaea.

"Everything we’ve seen is a surprise," Mr. Venter said in a phone interview from his marine research vessel, Sorcerer II, in the Sea of Cortez. The unexpected variety of microbial DNA he’s found overturns earlier notions that the oceans are a homogenous soup of bacteria and other microscopic life. The details are being published today in the Public Library of Science Biology, an Internet-based scientific journal.

A diverse supply of microbial DNA from the oceans could be a rich lode for scientists. Drug companies are hunting for new compounds in sea creatures, especially to attack cancer and neurodegenerative diseases. The new data will also allow researchers to compare the DNA of oceanic bacteria to the genetic code of microorganisms that cause human disease.

"This is the largest DNA sequence ever obtained, and the magnitude of what’s being done is entirely unparalleled," said Douglas Bartlett, professor of marine microbiology at the University of California, San Diego, who isn’t involved in Dr. Venter’s project. Marine microbes "have all kind of metabolic activity. It is expected that [Dr. Venter’s team] will discover new pathways for making drugs and treating infectious disease."

 

For the full story, see: 

GAUTAM NAIK.  "Seafaring Scientist Sees Rich Promise In Tiny Organisms."  The Wall Street Journal  (Tues., March 13, 2007):  B1 & B5.

 

   Photo on left shows Venter (on left) on his Socerer II research ship.  Photo on right shows a slide of sea bacteria collected by Venter.  Source of photos:  http://scrippsnews.ucsd.edu/Releases/?releaseID=706

 

Why More Cancer Screening May Not Lead to Longer Lives

(p. D8)  Most of us interpret “increased survival” to mean fewer deaths. But it does not, because survival is subject to two powerful distortions.

The first is called lead-time bias. Simply advancing the time of diagnosis (as with CT screening) will always increase survival.

Imagine two patients with lung cancer. Even if both die at age 70, a patient with cancer diagnosed by spiral CT screening at age 59 has a longer survival than one with cancer diagnosed because of symptoms (cough, weight loss and so on) at age 67. The first patient survives 11 years; the second 3 years. But both died at the same age. Survival is increased, but mortality is the same.

A second source of distortion results from overdiagnosis, when screening finds cancers that were never destined to progress and cause death. Overdiagnosis bias can also drastically inflate survival statistics, even if mortality is unchanged.

To understand why, you need to understand the definition of the two statistics. Both are fractions. Survival is calculated over a fixed period, for example 5 or 10 years.

Overdiagnosis inflates both the numerator of the survival statistic (number alive at a specified time) and the denominator (number of diagnoses). For the mortality statistic, overdiagnosis has no effect on the numerator (number of deaths) or the denominator (number studied). Perhaps the easiest way to understand this is to imagine if we told all the people in the country that they had lung cancer today: lung cancer mortality would be unchanged, but lung cancer survival would skyrocket.

The goal of lung cancer screening is to reduce mortality — to save lives. Because the New England Journal study examines only survival, it cannot tell us whether any lives are saved. Because the JAMA study examines mortality, it is the more valid study. It also corroborates the Mayo trial finding that a significantly increased survival rate can coexist with no difference in mortality.

 

For the full essay, see:

H. Gilbert Welch, Steven Woloshin and Lisa M. Schwartz.  "ESSAY; How Two Studies on Cancer Screening Led to Two Results."  The New York Times  (Tues., March 13, 2007):  D5 & D8.

 

The New England Journal of Medicine article was published on Oct. 26, 2006, and the lead author was Claudia Henschke.

The JAMA article was published in March 2007.

 

 

 

Hospital Heart Care Better on Weekdays, than on Weekends

   The open spaces in the weekend hospital parking lot on the left, compared to the crowded weekday lot on the right, is consistent with the findings of lower weekend staffing levels.  (These photos are from Toronto’s Sunnybrook Hospital.)  Source of photos:  online version of the NYT article cited below. 

 

An extensive study of heart attack patients in New Jersey finds that those who arrived at hospitals on weekends were less likely to receive aggressive treatment and were slightly more likely to die than those who arrived on weekdays, researchers are reporting today.

The study, based on an analysis of 231,164 heart attack patients admitted to New Jersey hospitals from 1987 to 2002, found a gap of almost 1 percentage point in heart attack death rates over one three-year span, 12.9 percent for weekend patients and 12 percent for weekday patients.

The deaths occurred within a month of admission.

In that period, 1999 to 2002, 10 percent of weekday patients had angioplasty to open blocked arteries on the day they were admitted, compared with 6.7 percent of weekend patients. Angioplasty within a few hours of the start of heart attacks can interrupt the attacks and save lives.

The study, led by William J. Kostis, a fourth-year medical student at the Robert Wood Johnson Medical School in New Brunswick, N.J., who also has a Ph.D. in electrical engineering, is being published today in The New England Journal of Medicine.

Dr. Donald A. Redelmeier, a professor of medicine at the University of Toronto who wrote an accompanying editorial, said the higher death rate on weekends “has everything to do with staffing in hospitals.” It can mean, Dr. Redelmeier said, that not enough expert medical staff members are available on weekends for prompt and aggressive treatment.

“It’s not just that there are fewer people around, but those who are around are often spread thinner,” he added. “And there is a shift in seniority, as well. The most skilled and savvy people don’t work weekends.”

 

For the full story, see: 

GINA KOLATA.  "Death Rate Higher in Heart Attack Patients Hospitalized on Weekends, Study Finds."  The New York Times  (Thurs., March 15, 2007):  A19.

 

 

To the Ultimate Luddites: “Build Coffins, That’s All You’ll Need”

   Charlton Heston as Robert Neville, the last scientist on earth.  Source of photo:  http://datacore.sciflicks.com/the_omega_man/images/the_omega_man_large_09.jpg

 

In the 1970s, one of my favorite films was "The Omega Man" (1971) starring Charlton Heston as the doctor/scientist who was the last healthy man on earth.  A plague had killed most of humanity, leaving a few in a demented "tertiary" condition.  Heston as "Robert Neville" had developed a vaccine, but only had been able to test it on himself, as the world collapsed.  

Those in the "tertiary" state had been organized by a former broadcast commentator named "Matthias" into the "family" whose goal it was to burn books, and destroy all remnants of science and technology. 

At one point near the end, the family captures Neville, and as the family destroys Neville’s paintings, and laboratory, Matthias rants that Neville is the last scientist, the last remnant of the old world, and that all will be well when they have destroyed him.  Then comes one of my favorite exchanges.

 

Matthias: Now we must build.

Robert Neville: Build coffins, that’s all you’ll need.

 

When I saw the movie again today (3/16/07) for the first time in decades, I was worried that I had built it up in my memory, and that the reality would be way disappointing. 

I was relieved to see that the movie, though not perfect, was still plenty good enough.

 

Venturing Into the Mean Streets to Get the Job Done

 

(p. 108)  It is worth pausing for a second to reflect on Snow’s willingness to pursue his investigation this far.  Here we have a man who had reached the very pinnacle of Victorian medical practice—attending on the queen of England with a procedure that he himself had pioneered—who was nonetheless willing to spend every spare moment away from his practice knocking on hundreds of doors in some of London’s most dangerous neighborhoods, seeking out specifically those houses that had been attacked by the most dread disease of the age.  But without that tenacity, without that fearlessness, without that readiness to leave behind the safety of professional success and royal patronage, and venture into the streets, his "grand experiment"—as Snow came to call it—would have gone nowhere.   The miasma theory would have remained unchallenged,

 

Source: 

Johnson, Steven. The Ghost Map: The Story of London’s Most Terrifying Epidemic – and How It Changed Science, Cities, and the Modern World. New York: Riverhead Books, 2006.

 

“To Live Was to Be Not Dead Yet”

In the passage below, Johnson begins by noting the reality captured in a phrase of Charles Dickens in the following pasage from Bleak House:  "Jo lives—that is to say, Jo has not yet died—in a ruinous place . . ." 

 

(p. 85)  The phrasing captures the dark reality of urban poverty; to live in such a world was to live with the shadow of death hovering over your shoulder at every moment.  To live was to be not dead yet. 

From our vantage point, more than a century later, it is hard to tell how heavily that fear weighed upon the minds of individual Victorians.  As a matter of practical reality, the threat of sudden devastation—your entire extended family wiped out in a matter of days—was far more immediate than the terror threats of today.  At the height of a nineteenth-century cholera outbreak, a thousand Londoners would often die of the disease in a matter of weeks—out of a population that was a quarter the size of modern New York.  Imagine the terror and panic of a biological attack killed four thousand otherwise healthy New Yorkers over a twenty-day period.  Living amid cholera in 1854 was like living in a world where urban tragedies on that scale happened week after week, year after year.  A world where it was not at all out of the ordinary for an entire family to die in the space of forty-eight hours, children suffering alone in the arsenic-lit dark next to the corpses of their parents.

 

Source:

Johnson, Steven. The Ghost Map: The Story of London’s Most Terrifying Epidemic – and How It Changed Science, Cities, and the Modern World. New York: Riverhead Books, 2006.

 

Medical Insurance Battle Wastes $20 Billion a Year

AthenahealthRevenueGraph.gif   Source of graph:  online version of the WSJ article cited below.

 

(p. A1)  Four years ago, Paluxy Valley Physicians of Glen Rose, Texas, was struggling to recoup more than $500,000 in denied or unpaid claims from insurers. Two of its eight doctors left the practice, while three others had to borrow $100,000 to keep it afloat.

To turn things around, the medical practice turned to Boston-based athenahealth Inc., one of the biggest of hundreds of companies in a lucrative niche: helping doctors wring payments from health plans. Athenahealth’s software flagged and corrected the complex coding for thousands of claims, preventing them from getting hung up in insurers’ Byzantine rules. Today, Paluxy Valley has whittled its claims outstanding to $179,000 and repaid the bank loan. No longer in a revenue crunch, its doctors have stopped moonlighting in the emergency room to make money.

"The insurers outcode us, they outsmart us and they have more manpower," says Shari Reynolds, the administrator at Paluxy Valley, which pays athenahealth a little over 3% of the $2.5 million it collects annually from insurers. "Now at least we have a fighting chance." 

Doctors increasingly complain that the insurance industry uses complex, opaque claims systems to confound their efforts to get paid fairly for their work. Insurers say their systems are designed to counter unnecessary charges and help keep down soaring health-care costs. Like many tug-of-wars over the health-care money pot, the tension has spawned a booming industry of intermediaries.

It’s called "denial management." Doctors, clinics and hospitals are investing in software systems costing them each hundreds of thousands of dollars to help them navigate insurers’ systems and head off denials. They’re also hiring legions of firms that dig through past claims in search of shortchanged payments and tussle with insurers over rejected charges. "Turn denials into dollars," promises one consultant’s online advertisement.

The imbroglio is costing medical providers and insurers around $20 billion — about $10 billion for each side — in unnecessary administrative expenses, according to a 2004 report by the Center for Information Technology Leader-(p. A18)ship, a nonprofit health-technology research group based in Boston.

 

For the full story, see: 

VANESSA FUHRMANS.  "BILLING BATTLE; Fights Over Health Claims Spawn a New Arms Race; Insurers and Doctors Try for Upper Hand; Firms Help Both Sides."  The Wall Street Journal  (Weds., February 14, 2007):  A1 & A18.

(Note:  I noticed some minor differences between the titles and texts of the print and online versions.  My excerpt gives the online version.) 

 

In Health Care “the U.S. is a Model of Inefficiency”

HealthcareSpendingG7graph.gif   Source of graph:  online version of the WSJ article cited below.

 

When it comes to managing its citizens’ health, the U.S. is a model of inefficiency.

Recently released figures from the U.S. Centers for Medicare and Medicaid Services show that in 2005, the U.S. health-care tab came to 16% of gross domestic product, more than any other country. France spends 10.5% of its GDP on health care, according to the Organization for Economic Cooperation and Development, while Japan spends 8%.

Americans don’t seem to be getting much for the money. In both France and Japan, the average life expectancy is higher than in the U.S., and the infant mortality rate is lower. This is true in most other OECD countries, so green tea and red wine don’t explain it all.

This is a drag on U.S. companies, raising their costs, pulling money out of consumer pockets and giving overseas firms a competitive edge.

 

For the full commentary, see: 

JUSTIN LAHART.  "AHEAD OF THE TAPE; Rethinking Health Care And the GDP." The Wall Street Journal (Thurs., January 25, 2007):  C1.

 

In Health Care the “Zeal to Treat and Spend May Actually Hurt Patients”

HeartAttackCostsBenefits.jpg   Source of graphic:  online version of the NYT article cited below.

 

EXPERTS have long been puzzled by the existence of large regional disparities in medical care in the United States. Even for diseases for which the appropriate treatment is widely accepted, doctors across the country take vastly different approaches, often leading to enormous expense without making any appreciable improvement in their patients’ health.

Consider heart attacks. Prescribing beta blockers immediately after a heart attack is a well-established, cheap and efficient treatment. In Iowa, nearly 80 percent of victims in 2000 received the drugs within 24 hours of a heart attack. In Alabama or Georgia, by contrast, fewer than 6 out of 10 patients received the drugs.

“What makes the lag in beta-blocker adoption puzzling is that the clinical benefits have been understood for years,” wrote Jonathan S. Skinner and Douglas O. Staiger, economists at Dartmouth, in a recent study about these regional patterns.

Congress has decided that some treatment decisions may be best taken out of doctors’ hands. In one of their last acts this year before adjourning, lawmakers passed a bill entitling doctors to a bonus from Medicare if they report data on the quality of their care, using criteria like whether they prescribe aspirin or beta blockers to heart attack victims. In the future, this data would permit Medicare to reward doctors who followed government guidelines.

. . .

. . . , much spending on health care provides enormous benefits. A study published this year by Mr. Skinner, Mr. Staiger and Dr. Elliott S. Fisher of Dartmouth Medical School found that Medicare spending on hospital care for heart attack victims surged two-thirds from 1986 to 1996, after accounting for inflation. But the percentage of victims who were alive a year after their attacks also increased, though by just 10 percentage points, to roughly 68 percent.

The relationship — rising costs bringing increased benefits — has broken down recently. From 1996 to 2002, Medicare spending on treatments for heart attack victims increased about 14 percent, after inflation. But there was virtually no improvement in survival rates.

There is mounting evidence that the zeal to treat and spend may actually hurt patients. The study by Mr. Skinner, Mr. Staiger and Dr. Fisher found that hospitals in regions where spending grew fastest from 1986 to 2002 had some of the worst practices, in terms of providing tried-and-true therapies, and recorded the smallest gains in survival rates.

Treatment of heart disease underscores the deeply idiosyncratic nature of many choices made by America’s doctors and hospitals. Coupled with a fee-for-service system that encourages aggressive treatment, these choices stimulate health spending that provides little benefit to patients. “A lot of the innovation and spending growth are going into gray areas that are not helping people that much,” Mr. Skinner said.

 

For the full commentary, see: 

EDUARDO PORTER.  "ECONOMIC VIEW; The More You Pay, the Better the Care? Think Twice."  The New York Times  (Sun., December 17, 2006):  5.

(Note:  ellipses are added.)

 

 

Good Intentions Are Not Enough

 

Another lesson from an intriguing book by Steven Johnson, is that Edwin Chadwick’s good intentions were not enough to beat the cholera epidemic in London.  Johnson tells of Chadwick’s two catastrophic illusions:

 

The first was his belief that, since the mephitic odors of private cesspools posed such a clear and present danger to health, sewage ought instead to be discharged down public drains into the Thames, from which most Londoners took their drinking water. As the great builder Thomas Cubitt remarked: "The Thames is now made a great cesspool instead of each person having one of his own."

The consequences of this well-intentioned blunder were worse even than those of the decision of the Lord Mayor during the Great Plague of 1665-66 to exterminate all the city’s dogs and cats because of the false rumor that they were spreading the plague, thus allowing an exponential increase in the population of the rats who were the real transmitters.

Having contaminated a large part of the population he was trying to protect, Chadwick committed his second mistake, sternly setting his face against the simple explanation that would bring about a cure. To his dying day — which did not come until 1890 — Chadwick remained an unrepentant miasmatist, as proponents of the airborne explanation for cholera were known. So was Florence Nightingale. The Lancet, the leading medical journal, venomously denounced the waterborne theory and its dogged proponent, John Snow.

 

For the full review, see: 

FERDINAND MOUNT.  "BOOKS; Lost in a Time of Cholera; How a doctor’s search solved the mystery of an epidemic in Victorian London."  The Wall Street Journal   (Sat., October 21, 2006):  P8.

 

The reference to the book is:

Johnson, Steven. The Ghost Map: The Story of London’s Most Terrifying Epidemic – and How It Changed Science, Cities, and the Modern World. New York: Riverhead Books, 2006.  299 pages, $26.95