June 22nd, 2009 by DrRich in Better Health Network
No Comments »
Thanks to Dr. Wes for pointing us to a remarkable video of a 20-year old Belgian soccer player having his life saved by an implantable cardiac defibrillator (ICD). DrRich hopes you will view it.
As it happens, DrRich will be traveling to Europe imminently at the invitation of Dr. Pedro Brugada, whom some call Belgium’s King of Electrophysiology, and for whom the Brugada Syndrome is namesake. (DrRich is deeply honored to be one of the “masters” at Dr. Brugada’s “Meet the Masters” event, which gives him the opportunity to spend two days with a hand-picked group of top European and American electrophysiology fellows. DrRich will undoubtedly learn a lot from them, and will try very hard not to ruin these fine young physicians before they’ve even started out.) In any case, one must suspect that Dr. Brugada (being, after all, Belgium’s King of EP) must have been somehow responsible for placing the ICD in this young soccer player.
DrRich will be sure to ask him how that young man managed to receive an ICD. Because most high-risk patients, in the U.S. and elsewhere, have to do without.
Despite the fact that ICDs are dramatically effective and dramatically life-saving in people who have dangerous cardiac arrhythmias (please do watch the video to see the drama for yourself), they are still used in only a tiny fraction of the identifiable patients who are at risk for sudden cardiac death. Consequently, in the United States alone, almost 1,000 patients each day die suddenly from cardiac arrhythmias who could have been saved by an ICD.
DrRich has written before about the covert rationing of ICDs, which is done so openly that one is tempted to drop the modifier “covert,” and has even written about how a former government official has admitted that he had no choice but to juggle the statistics of a randomized clinical trial (i.e., to bastardize the science) in order to avoid having to pay for ICD therapy in broader categories of patients. That’s old news, and there’s no reason to beat it to death again here.
Instead, DrRich would like to explore another question – Why are ICDs still so damned expensive?
Having worked closely with ICD manufacturers since the early 1980s (which, DrRich knows, makes him a very bad person), he perhaps more than most appreciates the engineering magic that has gone into making and improving these devices over the years. It is a truly remarkable thing that one can build a tiny implantable device that a) houses a computer that runs an extraordinarily sophisticated heart rhythm analyzer that, from beat to beat, accurately diagnoses the heart rhythm in real time; b) can deliver a tiny electrical pacing impulse to the proper cardiac chamber at the proper time, from beat to beat, to coordinate and optimize cardiac function; c) then, if a fatal arrhythmia develops, to deliver a very big shock to the heart within 10 – 15 seconds, to restore the rhythm to normal (please do see the video); d) wirelessly communicate via the Internet to tell the doctor (and anyone else who needs to know) its own condition and the condition of the patient; e) all the while surviving in a hostile, high-temperature, salt-water environment (i.e., the human body), for 5- 7 years, without (for the most part) corroding, leaking, rusting, blowing up, or otherwise malfunctioning.
Try to get your iphone to do that.
At this point, most of DrRich’s regular readers are likely expecting him to say: No wonder these beasts cost $15,000 to $25,000 apiece. Just look at the sophisticated technology that is built into them!
And it is indeed true that over the past 27 years, hundreds of millions of dollars have been invested in making ICDs smaller, more reliable, longer lasting and safer. It is also true that the companies that make these devices ought to be fairly rewarded for their efforts in this regard. And for many years (DrRich estimates that the “right” number of years was about 18) the high cost of ICDs was easily justifiable, given the steady, remarkable, important and meaningful improvements in technology that took place during that time, improvements that were being funded by the cost of the devices.
But DrRich argues that by the turn of the millenium, ICD technology had become largely mature, and that since that time improvements (while still happening) have been merely incremental. “Gingerbread” might be too strong a term, but nonetheless that’s the term that pops into DrRich’s mind. The fact is that by the year 2000, all ICD manufacturers were building reliable, safe devices that were really good at preventing sudden death, and improvements since then have not altered (or materially improved on) that fact.
Here’s a truth that ICD manufacturers would not like us to know: It only costs them a couple of thousand dollars to build an ICD. DrRich does not know the precise dollar amount (very few people even in ICD companies know these precise amounts) but based on his experience he cannot see how it could be much more than about $3000 per unit. Now, lest you think that the roughly $22,000 difference between the cost to manufacture and selling price is pure profit, it’s not. ICD companies continue incurring expenses as long as an ICD remains in service. These “lifetime” expenditures include monitoring of device function; maintaining expensive, rigorous quality and reliability processes; and backing up every implanted device with a large force of highly-trained and expensive field clinical engineers who are available to electrophysiologists 24/7, anywhere and everywhere, for “troubleshooting” and even for routine follow-up. All this “extra” stuff must be fully accounted for in the initial price of the device.
Still, ICD manufacturers make a very, very nice margin on every device they sell. Few businesses in the world enjoy this kind of price margin.
With all that “room” to play with, one might think market forces would by now have brought the price down for a mature technology like this, especially since over the past few years the growth of the ICD market has flattened, and ICD companies now must compete with each other for more market share if they want to grow their businesses.
But classic market forces usually do not work in healthcare, and that is especially true when it comes to ICDs.
It all begins with Medicare reimbursement, which sets the price for ICDs, and consequently the cost of ICDs is likely to remain at $15,000 – $25,000 forever.
Now, to be sure, the government does not directly determine what companies get paid for ICDs. Rather, they indirectly determine the price by deciding what hospitals and physicians will be reimbursed for implanting ICDs. Those reimbursement rates apparently vary substantially from region to region and hospital to hospital (who knows how the government determines these things?), and the rates are not publicly available to DrRich’s knowledge. But ICD manufacturers, at worst, can impute the reimbursement rates by figuring out the top price specific hospitals are willing to pay for ICDs (hence the range in prices).
Having determined the top price they can possibly get paid for ICDs, the only logical strategy for manufacturers is to figure out how they can always get paid that top price for every device they sell. They do this by making ICDs specifically aimed at keeping the decision makers happy. And the decision makers, by and large, are the electrophysiologists.
Electrophysiologists decide who gets ICDs, and they decide which ICDs to implant. So, to keep prices at the highest possible level, ICD companies must cater to the wants and needs of electrophysiologists (their true customers), and so must produce a steady stream of new, improved ICDs whose novel features are requested by these very high-end, high-maintenance physicians.
Electrophysiologists have a clear agenda in this regard. Their “demands” on ICD companies, expressed in rigorously conducted marketing surveys and focus groups, inexorably lead to ever more complex devices. This complexity helps electrophysiologists (a small community whose growth is tightly controlled) to maintain a professional stranglehold over the implantation and management of ICDs.
It’s a matter of turf protection.
Since ICDs are already exceedingly complex devices, and grow more complex with each succeeding generation, then “obviously” one must be a high-end specialist like an electrophysiologist to understand and manage all their nuances. (In real life, ICDs have become so complex that not even a majority of electrophysiologists can keep up with them any more, thus necessitating armies of “clinical engineers” in the employ of ICD companies who can do troubleshooting in the field.)
All the ICD manufacturer needs (and wants) to know is: what gingerbread do I need to add to my next generation of ICDs to make them even more stupefyingly complex, so as to maintain the loyalty of my electrophysiologist customers? If they can answer this question manufacturers will continue to be paid top dollar for their product (again, as determined by regional reimbursement rates set by the government).
And this is why, despite the fact that ICD technology has been fully mature (says DrRich) for most of a decade now, which in a functional market would cause the price to plummet, the cost of ICDs remains so high. Whatever has developed in the complex interplay between ICD manufacturers, electrophysiologists, hospitals and the government, it’s not a functional market.
Among other things, this dysfunctional economic model (if that’s what it is) utterly precludes ICDs ever becoming available to a large proportion of individuals whose lives could be saved by them. They’re simply too expensive and complex for widespread usage.
Covert rationing, of course, thrives on opacity, obfuscation, confusion, inefficiency and complexity, and the convoluted ICD “business model” provides many, many avenues for covert rationing. So while the price remains high, relatively few ICDs actually end up being implanted (compared to the number of patients who have clear, FDA-approved indications for ICDs). In fact, the growth curve for ICD implantation has been successfully flattened for almost five years now (despite projections earlier this decade for 20% annual growth for years and years) – and it is likely to stay flat.
If we were to have a system of fully transparent, open rationing, then the ICD business model would rapidly be seen as the travesty of confusion that it is. Furthermore, a system of open rationing would quickly goad ICD manufacturers away from catering to the turf-based requests for more complexity by electrophysiologists. They would quickly develop ICDs that are simple, reliable, effective, easy to implant, long-lasting and cheap, and which could be safely implanted and managed by non-electrophysiologists.
The technology to do that exists today.
This is an example, DrRich believes, where open rationing would ultimately lead to more usage of a life-saving technology, by driving industry to put their development efforts into reducing the cost and increasing the simplicity and reliability of their products, and thus making them more cost effective, rather than striving to make them more attractive to high-end-physician decision makers. If they did this, then videos like the one Dr. Wes has shown us would no longer merit mention on blogs or on any other form of media, as ICD rescues would become very common.
DrRich has been telling all this to ICD companies for many years to no measurable effect. Of course, it has been well documented that DrRich is more than willing to tell his clients stuff they may not particularly want to hear. (It’s truly amazing that he can still make a living as a consultant.)
In any case, here’s DrRich’s investment advice for this week: The growth of the ICD market is destined to remain flat as long as high-priced, gingerbread-laden ICDs that only an electrophysiologist can love remain the norm. Avoid companies whose growth depends on these devices. On the other hand, the ICD market is ripe for a major disruption, if one of these outfits ever figures it out.
DrRich will now fade into quietude here for a week or so, as he entertains those nice people in Europe with his crazy ideas about healthcare.
*This blog post was originally published at The Covert Rationing Blog*
June 22nd, 2009 by Dr. Val Jones in Expert Interviews
No Comments »
Evan Falchuk is the President and COO of Best Doctors – a company designed to solve the “failure of information synthesis” that occurs in a convoluted healthcare system that rewards speed over accuracy. I met Evan for a breakfast in Boston last month – and found him to be a highly perceptive, passionate, and affable individual. He’s the kind of guy who asks the right questions, and has a firm grasp of what ails us – both at a personal and systemic level. I like what he’s up to – and invited him to be a regular contributor to Better Health. So for your reading enjoyment, I’ve prepared a transcript of our recent interview:
Dr. Val: What is Best Doctors?
Falchuk: Best Doctors exists for a simple reason: as many as one in five patients get the wrong diagnosis. It usually happens because of a failure to put together the information in a patient’s case in a way that leads to the right answer. Best Doctors offers an in-depth analysis of a patient’s medical information to make sure they have the right diagnosis – and that they are on the right treatment path given their condition and preferences.
Doctors receive the information from Best Doctors well, because it’s pertinent, useful, and from recognized experts in the important questions in the case. We have a very high regard for doctors, and so we do our best to make sure the information we deliver helps the doctor and their patient make good decisions together.
Best Doctors makes money by selling its service to companies, who give Best Doctors as a free benefit to their employees and their families. We do a lot of work with these companies to encourage their employees to call us when they’re facing a medical situation. All our cases are voluntary, confidential and independent of health coverage.
Our customers say they buy Best Doctors for a couple of reasons. First, they want to help their employees deal with the uncertainty they face when they or a family member are sick. And second, they find that if they can help their employees avoid incorrect diagnosis and treatment, they can save a lot of money on health expenses. Since we find that about 20% of cases have something wrong with the diagnosis, and about half have something wrong with the treatment, you can see where the improvement in quality and cost happens.
Dr. Val: Is Best Doctors a family business?
Falchuk: It started out that way.
My father, who is an internist and Professor at Harvard Medical School, started the company about 20 years ago, along with another doctor. They are both from overseas, and regularly saw patients who traveled to Boston for answers to their medical problems. Usually, they were able to tell their patients that their doctors had done the right things, but often they found serious problems. In those cases they worked closely with the patients and their doctors to fix them.
My father taught me that if you spend time thinking about the right questions, often the answers become obvious. This has always been the philosophy he teaches his medical students, and it is the vision we try to implement every day at Best Doctors.
So much of how our health care system is organized today seriously undervalues thinking. We can’t really change the health care system but we can change what happens to each person we help. It’s an important and inspiring mission.
As far as the business is concerned, what started out as an idea 20 years ago is now in 20 countries around the world and covers millions of people. It’s come a very long way, but there is still so much more to do.
Dr. Val: Why did you leave your law practice in DC to work with your dad in the medical world (or – why didn’t YOU become a doctor?)
Falchuk: After studying history in college, I became an attorney. For the next five years, I worked in a big law firm in Washington, DC– although if you count up the hours I worked, it was probably more like 50 years. I learned a lot and had the privilege of working with some extraordinarily gifted people. I liked being a lawyer. The trouble was, I didn’t love it. So I am very fortunate to have a father who not only created such a great business, but who also was thrilled to have the chance to have his son work in it with him.
Some people tell me I was destined to do something in health care. My mother is a nurse, and is now the President of Hadassah, perhaps most well-known for its terrific global health programs and its world-renowned hospital in Israel. My sister works for a big pharmaceutical company. Among my uncles and cousins on both sides of my family I count no fewer than a dozen doctors. Even my brother is in on it – he is an executive producer and director of the TV show Nip/Tuck.
Dr. Val: Tell me about your brother’s brush with a misdiagnosis.
Falchuk: His story is really a classic example of what Best Doctors is all about. He was working on his new TV show, Glee, and woke up one day with numbness on one side of his body.
His doctor first told him to wait it out, then sent him to a chiropractor, then some physical therapy. Nothing worked. He was thinking about getting a steroid injection, but his doctor first ordered an MRI. It found bad news: a malignant tumor in his spinal cord, high up in his neck. He was referred to a neurosurgeon.
The neurosurgeon told my brother he would first have radiation on the tumor. Then he would have surgery in which his spinal cord would be carefully cut open to remove the tumor. He was told he could end up paralyzed, or dead. That was when he called me, and we started a case at Best Doctors.
One of our nurses took a history, and we collected his records. Two internists spent hours reviewing them. The records noted our family history of a kind of malformed blood vessel called a cavernous hemangioma. Our grandfather had hundreds of them in his brain when he died at 101, and our father has dozens of them in his. I’ve got one in my brain, too. This was in my brother’s charts, but none of his doctors had mentioned it.
We asked an expert in these malformations if this was something that ought to be ruled out. The expert said an MRA should be done to see if that was what was going on. We gave that information to my brother and his doctors, and they agreed. The test showed that this was exactly what my brother had in his spinal cord.
Quickly, the plan changed. Although he still needed surgery, there would be no radiation. That might have caused the malformation to bleed, which would have caused the terrible complications we were worried about. Even if that didn’t happen, the surgeons were prepared to operate on a malignant tumor. They would have been surprised to find a delicate malformation there instead.
He had his surgery at the end of November and it went well. He is having a good recovery and is very busy with his new TV show. But his case is a sobering example of the kinds of things we see all the time.
Dr. Val: Who should use Best Doctors services?
Falchuk: If your company has Best Doctors, I always say that if you feel unsure about your medical care you ought to call us. From what I have seen, patients are the first ones to know that something isn’t right and have the most at stake in the outcome. The worst that happens is that we will confirm you are on the right path. But everyone is entitled to feel confident that they are making the right decisions for themselves and we want to do whatever we can to help provide that.
Dr. Val: How can people gain access to Best Doctors services?
Falchuk: Your employer signs up for Best Doctors and then makes it available to you and your family for free. We don’t have an individual consumer program – we prefer to provide this for free to members and their families.
Dr. Val: What do you make of the “Health 2.0” movement – and how is it impacting your business?
Falchuk: I see Health 2.0 as being about consumers being active participants in their care. There are a couple of trends intersecting. Yes, there is a ton of information available on the internet, some good, some not so good. But there is also this growing sense that you have to advocate for yourself so you don’t fall through the many cracks in our health care system. This idea of an “activist” patient is going to be an increasingly important part of the landscape. As a business, we play an important role helping people be good, smart, helpful advocates for their own cause.
Dr. Val: Do you have any words of wisdom for patients out there who are trying to get good care?
Falchuk: My best advice is: don’t get sick. If you must get sick, make sure that you ask as many questions as you can, and learn as much as you can about what is going on. If you’re not satisfied with the answers you are getting, don’t be afraid to ask for a second opinion. Remember, you are entitled to feel confident that you are making the right decision for yourself.
June 21st, 2009 by Dr. Val Jones in Book Reviews
No Comments »
Have you ever been seated next to a screaming infant in an airplane? If so, you know that even short flights can feel like an eternity. But the question is: why is the baby so miserable? Is there something that can be done to ease their discomfort?
According to pediatric gastroenterologist Dr. Bryan Vartabedian, the answer is a resounding “Yes!” In his new book, Colic Solved Dr. Vartabedian (or “Doctor_V” as he is known on Twitter) describes why unexplained fussiness may often be caused by gastroesophageal reflux disease. Doctor V explains that “colic” is an old-fashioned term to describe the behavior of uncomfortable babies. Colic is not a medical diagnosis anymore than “crying” is… and fortunately the underlying cause of “colic” has been discovered so that it can also be treated.
I met Doctor V at a conference in Albuquerque, New Mexico a couple of months ago. Before our introduction I had no idea that he spent all of his clinical time examining and treating screaming babies – but once that fact was revealed, I understood immediately that he was the right guy for the job. Doctor V is a tolerant, affable man with a tremendous sense of humor and a voice made for radio. He is not easily flustered and has a genuine curiosity about others and their life stories. In fact, there’s something soothing about Doctor V – something that makes you feel that everything’s going to be ok.
And so it’s no surprise that Colic Solved is a written expression of Doctor V’s winsome personality. Every chapter is filled with empathy and reassurance, yet with a clear path forward for teasing out the real cause of a baby’s misery. In most cases, “colic” is actually caused by milk protein allergy or infant reflux (a painful burning sensation caused by regurgitating stomach acid). Doctor V carefully explains how to tell the difference, and what to do about it. Interspersed are amusing vignettes called “Tales From The Crib” in which parents with difficult-to-soothe babies navigate their way towards a resolution.
But best of all, Doctor V does not hesitate to do some good old fashioned myth-busting when it comes to exaggerated claims not based on scientific evidence. Infant formula makers, baby bottle makers, and baby product manufacturers are notorious enablers of magical thinking – moms and dads purchase all kinds of products in a desperate attempt to soothe their babies. Unfortunately, most of these solutions do not treat the root cause of the problem – though businesses thrive on colic cures for desperate parents.
Here’s an excerpt of Doctor V’s exposé of a common soy formula myth (p. 117):
Soy Formula – Do You Feel Lucky?
One of the first impulses for parents with a screaming baby is to reach for soy formula. It sounds all natural and easy to digest. But the role of soy formula in the milk-allergic baby is very misunderstood…
The real problem with soy formula comes with the belief that it’s a reasonable cure for the allergic baby. But up to 50% of babies who are allergic to cow’s milk will react to soy protein in a similar way, so if you or your pediatrician chooses to treat your allergic baby with soy formula, you should consider it a gamble…
Colic Solved is a gem of a book. It’s witty, wise, and well written – a must-read for any parent of a chronically fussy baby. I also think that pediatricians and family physicians should strongly consider prescribing this book to parents of unhappy infants. There’s probably no better way to solve colic once and for all.
