February 19th, 2009 by Dr. Val Jones in True Stories, Uncategorized
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Shaun Donovan
Bob Schieffer may be dipping his toe into the micro-blogging phenomenon that is Twitter. I can only imagine how little time he has for this kind of thing, being that when I last interviewed him, he had about 500 emails/day to triage.
But he tried an interesting experiment today – asking the Twitterverse what they’d like him to ask HUD Secretary Shaun Donovan on Face The Nation this Sunday. I suggested that most Americans were probably curious to know who qualifies for federal assistance with their mortgages.
What would you like Bob to ask Shaun? You can make suggestions or follow Bob on Twitter: @bobschieffer
And for a bit of trivia – it’s a small world after all – Shaun Donovan’s younger sister went to medical school with me. She has kindly hosted me at her apartment in New York City on numerous occasions – so it seems that her whole family is directly involved with housing people of all walks of life – even bloggers.
February 19th, 2009 by Dr. Val Jones in Health Policy
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Dan Todd, Senior Manager of Reimbursement for Amgen Pharmaceuticals, recently presented a candid view of how current healthcare reform initiatives may negatively impact his industry. Here are the highlights from the Medicare Policy Summit in Washington, DC:
1. Comparative Effectiveness Research: while the Obama administration’s new emphasis on comparative effectiveness research is not supposed to influence coverage decisions or draw conclusions about “cost effectiveness” – there is no current policy to prevent that from happening. Pharmaceutical companies are nervous about coverage being denied for their products that don’t fare well in head-to-head studies with alternative treatments.
2. Physician Payment Reform: as payment mechanisms move away from fee-for-service and towards episodic care compensation, physicians will no longer be directly influenced by price differences between drugs. Specialist physicians who used to purchase drugs (such as in-office administered chemotherapy agents) under a competitive acquisition program from pharmaceutical companies (and then seek reimbursement from Medicare), will now have less incentive to select one drug over another based on price. Physician compensation will not be dependent on the price difference between drugs – but on the overall bundled services for an episode of care for each patient.
3. The Rise Of Primary Care: as more emphasis is placed on improving compensation to primary care physicians, specialist services will likely receive lower reimbursements to cover the higher payments for PCPs. Since specialists are more likely to prescribe more expensive drugs that have more generous margins (under Medicare Part B), the pharmaceutical industry will be negatively impacted by the improvements in primary care reimbursements for cognitive services.
4. Stifling Innovation: perhaps the most compelling argument made by Mr. Todd is the potential stifling of innovation that a comparative effectiveness regime could impose. Blockbuster drugs are rarely discovered in a vacuum. They are the result of incremental steps in understanding the biology of disease, with an ever improving ability to target the offending pathophysiologic process. The first few therapies may offer marginally improved outcomes, but can lead to discoveries that substantially improve their efficacy. If an early drug is found to be only marginally better than the standard of care, an unfavorable comparative effectiveness rating could kill the drug’s sale. Without sales to recoup the R&D losses and reinvestment in the next generation of the drug, development may cease for financial reasons, and the breakthrough drug that could cure patients would never exist.
5. Timing The Release Of Drugs: Navigating the complexities of Medicare reimbursement, with its separately funded Part B and Part D, is a pharmaceutical company nightmare. With the additional scrutiny on comparative effectiveness and functional equivalency proposed in reform measures – timing of drug releases make a big difference in reimbursement. Take a subcutaneous (SQ) versus an intravenous (IV) version of a given drug for example. The market for the SQ administration is much larger than that of the IV route, but if the drug company releases the SQ version too soon, denial of payment for the more expensive IV version will begin to eat away at profitability. As Dan summarizes, “there’s a fine line between expanding your market and cannibalizing it.”
February 18th, 2009 by Dr. Val Jones in Health Policy
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At the recent Medicare Policy Summit, Tim Hermes, the Senior Director of Government Affairs for Sepracor, offered an overview of Medicare’s current cost control strategy. These six strategies are part of Medicare’s policies, but are not necessarily applied evenly or consistently.
1. Functional Equivalency: if 2 drugs are deemed to be functionally equivalent, then their average sales price may be linked so they are reimbursed at the same rate.
2. Inherent Reasonableness: CMS has the right to decrease payments for treatments, that are deemed not to be inherently reasonable, by increments of 15% at a time.
3. Widely Available Manufacturing Price (WAMP): when the average sales price of a drug is higher than the WAMP, CMS has the right to reduce the drug’s price to the WAMP.
4. Coverage Restrictions: CMS can choose to restrict coverage for any drug, especially for off-label uses.
5. Judicial Bar: Only Medicare beneficiaries can sue CMS. Manufacturers may not.
6. Congress: there are several committees that have jurisdiction over Medicare, including the Senate Finance Committee, the House Ways and Means Committe, and the House Energy and Commerce committee. Congress can enact legislation to decrease the average sales price of drugs, and can influence Medicare cost control mechanisms.
February 18th, 2009 by Dr. Val Jones in Primary Care Wednesdays
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Dr. Val’s note: this post is Dr. Dappen’s continuation of “Sneaky Things That Doctors Do To Survive Financially.”
***
The Funnel
By Alan Dappen, M.D.
Back to the gridiron we go. Two powerful teams square off. It’s Team Doctors vs Team Insurance. You, the patient, the object of our affection, have bought entry to this game through two payments. The first serves as your season ticket, and is the $800/month fee (coverage for a family of four) that goes to Team Insurance. You gain admittance to today’s game through your $20 dollar co-pay, which is collected by Team Doctor.
The $20 co-pay is really a ruse to distract attention away from Team Insurance and the plays the Doctors are about to pull. In reality, $20 co-pay doesn’t come close to covering the cost of an office visit (more about this on a future posting). Team Insurance is supposed to make up the difference of these costs for Team Doctors. To stay in the game, Team Doctors must hit Team Insurance just right to cough up enough money to cover their bills. On the other hand, Team Insurance hits back, denying and delaying payment of claims from Team Doctors, pocketing plenty of money to keep their fans (share holders) screaming “We’re Number One.” The focus of this game is on money, with the patient distracted by the $20 co-pay, believing it is fair payment and the middle man (insurance) works in their best interest.
Now let’s look at “The Funnel,” the number one play Team Doctors use to recoup their money. Let’s say you have a typical medical problem and contact your primary care provider for help. You inadvertently have stepped into the playing arena. To get you the help you need, Team Doctors will run you through “The Funnel.” This formation is the most effective play used to sustain doctors financially. Keeping The Funnel packed to the brim with patients is critical to the success of a medical office, with this success hinging on seeing at least 25 patients a day and keeping the simple problems coming back to ensure the cash follows.
Here’s how The Funnel works:
1. Overloading: Also known as seeing patients for anything. Insurance companies will only pay primary care providers for a face-to-face visit, and not a phone call or email consultation. Ironically, 70% of typical day-to-day primary care problems can be solved by a phone or email conversation only. Doctors need payment from insurance providers to stay in business so only conduct office visits, no matter what the problem. Think back on some of your medical needs and how they were handled: Need a prescription refill? Need to ask a simple question? Need an antibiotic? Need to set-up or discuss a lab test? Need a follow up? Make an appointment to be seen. Welcome to the funnel!
2. Get the patient through as fast as possible: Keeping the flow rate constant through the funnel means limiting opportunities where patients can slow their transition through the neck of the funnel, possibly plugging it up, and thus slowing the doctors’ chance for cash. Four major strategies keep the pay/time ratio flowing properly for Team Doctors:
a. Ration the long visits, like a physical, by making patients wait 6-12 weeks to come in for them.
b. Divide and conquer the 20 minute visit. Invite the patient to stick to one problem per visit and then invite her to return to the top of funnel on another day for any additional problems.
c. Find ways to “increase value” of visits by requesting additional tests or services, like “How about we do an EKG?”
d. Turfing the “complicated (time consuming)” issues to other practices. Ever been sent to a specialist that your doc couldn’t solve your problem 10 minutes? This is why.
3. Get the patient to come back, as often as possible. Also know as a refilling The Funnel. Continuous, fast-paced repeat business is the most important measure of a financially solvent office. Imagine this: Medical partners who get to know their patients and consequently care for their well-being create liabilities if that caring takes longer than 10 minutes on average per patient.
I invite readers to write in their examples of being part of the funnel. Did the funnel compromise your care or inconvenience you? Why would the doctors run you through the funnel?
Lastly is the question: What can you do about The Funnel? Better understand the system, why the funnel exists and why it’s important that you, the patient, take control of not only your care, but how it’s paid.
Until next week, I remain yours in primary care,
Alan Dappen, M.D.
February 17th, 2009 by Dr. Val Jones in Announcements
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The Biotechnology Industry Organization (BIO) announced on February 12th the creation of the Biotech Humanitarian Award, to be given to an individual in the field of biotechnology who has enhanced the human experience by harnessing the power of biotechnology to heal, feed or fuel the planet.
The Biotech Humanitarian Award will recognize individuals behind tangible improvements in the area of therapeutics, food and agriculture or industrial and environmental applications. The inaugural award and a prize of $10,000 will be presented in May at the annual BIO International Convention, and the five finalists will be recognized as well. The 2009 BIO International Convention runs May 18-21 in Atlanta, Georgia.
Nominations are open to all individuals and can be accessed via iambiotech.org. Nominees must have achieved one of the following: produced new applications, significantly advanced biotech applications or made available tangible, applicable results in the food and agriculture, industrial and environmental, or therapeutic sectors.
Qualified nominees for the Biotech Humanitarian Award will be professionals in the biotechnology field including scientists, researchers, academics, entrepreneurs, financiers, philanthropists, educators, advocates and others who have added value to society through their pursuit of biotechnology processes.
