That didn’t take long.

Just 3 days after the Big O appeared to make serious hay out of last Monday’s announcement that key health care stakeholders were steppin’ up to save 2 trillion or so in future health care costs, reps from providers and insurers threw a bushel of thumb tacks on the road.

The Coronated One had hailed their cost-cutting promise as historic.

“These groups are voluntarily coming together to make an unprecedented commitment,” Obama told the New York Times. “Over the next 10 years, they are pledging to cut the rate of growth of national health care spending by 1.5% each year, an amount that’s equal to over $2 trillion.”

Not so, say the reps, who clearly caught an earful from their constituencies after the photo op. They claim to have agreed to cool off spending more gradually and never did they sign up for specific year-by-year cuts.

“There’s been a lot of misunderstanding that has caused a lot of consternation among our members,” Richard Umbdenstock told the Times. And the president of the American Hospital Association added that he’s “spent the better part of three days trying to deal with it.”

To make matters worse, Nancy-Ann DeParle, the director of the White House Office of Health Reform, then pulled a John Kerry by saying “the president misspoke,” and then saying “I don’t think the president misspoke. His remarks correctly and accurately described the industry’s commitment.”

Karen Ignagni, president of America’s Health Insurance Plans remembers reaching consensus around the concept that savings would “ramp up” more gradually than what Obama had said.

And for his part, David Nexon, an EVP of the Advanced Medical Technology Association recalled that “there was no specific understanding” of the pace with which savings would be achieved.

Everyone agrees that controlling health care cost escalation is vital to cutting our budget deficit.

The problem is that no one agrees how to do it, and yesterday’s kumbayah press release by key stakeholders certainly hasn’t addressed the issue substantively.

The Big O has already ticked-off Big Insurance by cutting payments to Medicare Advantage plans, and the $1.1 billion he tucked into his Economic Hail Mary for comparative effectiveness research has garnered similarly negative reviews from Big Pharma and the Device Makers.

Obama believes cost-effectiveness research can help physicians reduce wasteful or ineffective treatments, especially if they are reminded about the findings at time they write orders.

This could be done by incorporating reminder systems into those newfangled EMRs he’s incentivizing physicians to adopt.

The Hail Mary allocated $400 million to the National Institutes of Health, $300 million to the Agency for Healthcare Research and Quality, and another $400 million to Health and Human Services.

This amounts to a budget increase, not a policy shift for AHRQ. For example, its 2007 guide to pain medication for osteoarthritis explained how a 30-day supply of Lodine cost $170 whereas the same course of treatment with aspirin cost $10.

And CMS has long-since established the precedent of using AHRQ-sponsored research in reaching coverage decisions for Medicare and Medicaid.

Still, the decision raised red flags for Big Pharma, whose trade group was one of the signees in yesterday’s kumbaya press release, and the device makers as well.

Teresa Lee, a VP at the Advanced Medical Technology Association, warned the Wall Street Journal for example that using “this research to deny access to appropriate treatments for patients with (specific) medical histories and needs should not be the objective.”

And on the Hill, Republican Senator Jon Kyl just missed passing legislation that would have prevented CMS from relying on comparative effectiveness research to deny coverage.

Charles Grassley and Russ Feingold, 2 key actors in health reform legislation, voted for that one.

A coalition of health industry stakeholders, including some that scuttled Hillary Care in 1993, have offered to help save $2 trillion from projected increases in health spending over the next decade, according to White House officials.

The group includes the American Medical Association, the American Hospital Association, the Pharmaceutical Research and Manufacturers of America, America’s Health Insurance Plans, and the Service Employees International Union.

“We are developing consensus proposals to reduce the rate of increase in future health and insurance costs through changes made in all sectors of the system,” the stakeholders wrote in a letter to the Big O that was obtained by the Washington Post.

“We are committed to taking action in private-public partnership to create a more stable and sustainable health care system.”

The groups want to meet with Obama before offering specifics.

Obama administration officials praised the offer as one that should enhance momentum for health care reform. Their goal is to have a bill passed by the end of this summer.

“As restructuring takes hold and the population’s health improves over the coming decade, we will do our part to achieve your administration’s goal of decreasing by 1.5 percentage points the annual health care spending growth rate,” the groups wrote.

Projections are that after just 5 years, the proposal would save a family of four $2,500 per year in health-care costs. Within a decade, the savings would “virtually eliminate” the nation’s budget deficit.

Of course this is all happy talk until the groups specify how they will achieve their cost reduction targets and how the required behavior will be monitored and enforced.

That is not going to be a walk in the park.

Still, it’s a good day for the health reform movement. Poll after poll after all has shown that while Americans care deeply about the number of uninsured citizens, their top complaint by far is the rising cost of care.

With apologies to GE, Disney and the 8 US citizens who remain optimistic about prospects for our health care system.

Welcome to the US Health Care Carousel of Progress!

Normal carousels just spin ’round and ’round and don’t get you anywhere, but ours is different.

The Health Care Carousel makes progress every year.

And progress isn’t simply moving forward, it’s working together and dreaming and assuring better health care for all.

Progress is the whiz-BANG of an MRI machine in use for the evaluation of a 22 year old with a headache. It’s the drug-induced smile on the face of a woman that became depressed after losing her home to foreclosure.

Progress is the rhythmic lub-dupp of a heart beating normally following a transplant for preventable cardiac disease. It’s the sound of an uninsured child wheezing in a crowded emergency room.

Why, you can hardly imagine all the amazing gadgets they’ve got in ERs nowadays!

Remember the sixties when folks got their exercise doing the Twist? Well, today we keep our cholesterol down with pills!

And our food safety system has never been better.

Our generation may be the first in 300 years to experience a decrease in life expectancy, but think how much worse it would be without $10,000 cancer drugs and blood thinners that prevent complications from hardware we’ve inserted into people’s bodies.

It’s never been easier to find a PCP, and would you believe it? They’re building our city’s 17th PET scanner right where that run-down urban health clinic used to be.

You should hear physicians rave about how those newfangled EMRs save them time.

And progress even has a smell! It’s the smell of money lining the pockets of a hundred-thousand physicians that have been bought off by Big Pharma.

With all these marvels, it’s hard to believe things could get better than they are right now. But as you join us for a spin around our Carousel of Progress, you’ll surely agree. Anything’s possible.

Ethics
In a referenced essay titled, Transparency in the Pharmaceutical Industry, Brain Blogger’s Jennifer Gibson describes how the impending passage of the Physician Payments Sunshine Act has motivated Big Pharma to disclose financial relationships with physicians. She warns there may be adverse consequences from this otherwise laudable development: some physicians will be discouraged from forging socially beneficial collaborations with the private sector.

Last week, the FDA’s Psychopharmacologic Drug Advisory Committee unanimously rejected AstraZeneca’s application to market its atypical anti-psychotic drug Seroquel for generalized anxiety disorder and major depression.

Merrill Goozner at GoozNews applauds the decision, but wonders whether the agency may have left itself open to charges of bias by seating a patient representative on the panel who had lost a son to cardiac arrest while taking the drug. 

Health Care Renewal contributor Roy Poses has reviewed an unseemly side show to the Madoff scandal. The antagonist is Ezra Merkin, a hedge fund director charged with fraud for misrepresenting his investment strategies.

Merkin and Madoff had served on the board of Yeshiva University, which lost $110 million to the Ponzi scheme. Their unholy alliance leads Poses to consider possible negative consequences of having too many financial types on the boards of academic institutions.

Insurance
In the latest chapter of her neverending odyssey to navigate Big Insurance and the health care system generally, Colorado Health Insurance Insider’s Louise Norris describes what happened when her husband needed knee surgery. The savvy couple planned for every contingency, yet still they encountered a system failure in the form of an out of network charge.

Jaan Sidorov at Disease Management Care Blog has proposed a frightening, unintended consequence of health care reform which is that private health insurers might, like AIG, become too big to fail.

Sidorov thinks creation of a new public insurer will prompt a wave of consolidation in Big Insurance, and the remaining behemoths will seek cover in the form of regulatory oversight from the Feds.

Over at The Health Care Blog, Brian Klepper has contributed a wide-ranging historical perspective on efforts by Big Insurance to control health care cost escalation.

After characterizing utilization review and PCP gatekeeper systems as well-intentioned but poorly executed efforts, he proposes that tricked-out workplace-based clinics (“onsite clinics”) may be a solution, and cites facilities on the premises of Cigna as shining examples.

He concludes however, that the proof will be in the pudding. After all, everyone thought UR and gatekeepers were good ideas, too.

There’s a great, big, beautiful tomorrow,
Shining at the end of every day

There’s a great, big, beautiful tomorrow
And tomorrow’s just a dream away

Man has a dream and that’s the start
He follows his dream with mind and heart

When it becomes a reality
It’s a dream come true for you and me

Access, Cost Escalation
InsureBlog’s Bob Vineyard reviews interim results from Massachusetts’ much publicized universal health care plan, which many believe should be a model for national health care reform.  The plan has left at least 200,000 state residents uninsured while utterly failing to rein in costs. And to make it right Vineyard warns, Bay state lawmakers are either going to have to squeeze providers even more or (gasp!) ration care.

At Managed Care Matters, Joe Paduda has posted a dispassionate, fact-based treatise designed to calm the knee-jerk anxiety that normally surrounds concepts like universal health care and rationing.

He points out for example that Big Insurance already engages in rationing through pre-certification processes, provider agreements and so forth.

He then dismantles the claim that universal health care leads to longer waiting times for care. Paduda concludes that if we manage to institute such programs, “access will go up and waiting times may well go down.”

Amid a fusillade of jabs and an occasional uppercut to the jaws of the Big O and his admirers, JD Bell reveals over at It Takes Work that Howard Dean has launched a web site to promote his own vision for health care reform.

According to Bell, Dean is concerned the Big O is waffling on his campaign promises, and wants nothing more for the American people than what Obama promised them prior to November 4.

Writing for Workers’ Comp Insider, Jon Coppelmen observes that employers’ most effective tools for managing comp losses vanish after they lay off employees. The trust, indeed the entire relationship between employer and former employee, is lost. This leaves claims adjusters, who are typically overworked and not properly incented, to manage workers’ compensation costs.

With unemployment approaching historical levels, Copplemen’s antidote, three proactive steps employers can take to manage the regrettable situation, is timely indeed.

Quality and Safety
A recent NEJM article on the cost and quality implications of readmissions has prompted Maggie Mahar to review the subject over at Health Beat. Mahar summarizes the views of White House budget director Peter Orszag and others on the matter, and then offers several home-grown suggestions about how to tackle the problem.

Mahar explores for example, the concept of bundling payments to hospitals and physicians who are responsible for care immediately following discharge, and directing special attention towards states in which the readmission problem is particularly severe.

Novo Nordisk had been prepared to discuss cardiovascular complications at last week’s FDA advisory panel meeting regarding liraglutide, its new diabetes drug, but instead the drug’s association with rare tumors of the thyroid drove the discussion.

Jeffrey Seguritan at Nuts for Healthcare summarizes the surprising development then expands into an informative discussion of the efficacy with which drug trials assess cancer risk.

There’s a great, big, beautiful tomorrow,
Shining at the end of every day

There’s a great, big, beautiful tomorrow
And tomorrow’s just a dream away

Man has a dream and that’s the start
He follows his dream with mind and heart

When it becomes a reality
It’s a dream come true for you and me

Legal
HealthBlawg’s David Harlow is generally supportive of the deal struck by CVS and Google, in which prescription data from the retail pharmacy giant can now be directly imported into Google Health, the search giant’s personal health record. On balance Harlow says, the gains in patient safety and quality outweigh the increased risk of breaches in patient confidentiality, at least for people who have not recently given birth to octuplets or are named Britney Spears.

Health IT
When a healthcare journalist came down with a touch of bronchitis, he blew off the last vendor meeting at HIMSS and went to the doctor.

His encounter underscored a yawning gap between today’s reality of spotty EMR adoption and a future-state of nirvana that has been promised by so many. 

The real-life story appears at Niel Versel’s Healthcare IT Blog.

We hope Neil feels better, by the way.

At the Health Business Blog, David Williams has posted a transcript of his interview with Wayne Guerra, the co-founder and chief medical officer of Healthagen, the maker of a way-cool iPhone application known as iTriage.

In the interview, Guerra explains how his mobile triage and health information tool can be used, the types of people most likely to benefit from it, and how he hopes to monetize the idea.

The Healthcare IT Guy invited Paul Nuschke, a software design expert at the IT consultancy Electronic Link to comment on the subject of EMR usability. Nuschke asserts there are three keys: the EMR should be easy to learn, efficient, and prevent errors automatically.

Nuschke appends a series of baffling screen shots which make it laughably clear that some of the mainstream players in the space aren’t quite there yet.

Policy
Over at the Healthcare Economist, Jason Shafrin asks, “Why have disability rates decreased?” To answer the question, Shafrin reviews a scholarly piece from the National Bureau of Economic Research. He notes that the apparently heartening trend has occurred despite an increasing burden of illness in the general population. The beneficial trends, he concludes, are attributable primarily to non-medical advances like “internet shopping, amplifying devices for phones and street ramps” rather than health care-specific interventions.

Damn, we thought we had something there for a moment.

Actual US Health Care Carousel of Progress:

Three years ago when Merck introduced Gardasil, the anti-HPV vaccine for the prevention of cervical cancer and genital warts in girls, the buzz focused on whether it might encourage girls to have sex.

Now, the vaccine maker wants to market the jab for boys and the tweets are all about vaccine safety and cost-effectiveness.

That seems fair.

Human papillomavirus causes cervical cancer, which strikes 10,000 and kills 3,700 US females per year. In males, HPV causes 7,500 cancers per year, involving primarily the penis and anus, and kills about 1,000. 

Gregory Zimet, a Indiana University professor of pediatrics marveled the hypocrisy. “I wonder if it was the reverse, and there was a vaccine for women that helped prevent prostate cancer in men, this would be as much of an issue.”

After the FDA green-lighted Gardasil in 2006 for girls aged 9 and up, medical groups recommended they should take the spike by age 12, or before they became sexually active.

At the time Merck tried to persuade states to add Gardasil to the list of vaccines required for children to attend school. It dumped that strategy after being scorched by critics who thought the decision should be left with parents.

Merck’s field tests of Gardasil in men show that it is safe in the short term, and that it prevents HPV infection, genital warts and precancerous growths.

Gardasil vaccination costs about $500 for the 3 shots and the related office visits.

As a result of their remarkable 3-year effort, Massachusetts lawmakers increased by 430,000 the number of people with health insurance in the state.

That leaves only 2.6% of Bay Staters uninsured, which is one-sixth the national average and by far the lowest rate in the nation.

Not only that, the legislators, working in synchrony with then Governor Mitt Romney, enacted the law faster than a Harvard Club Eight.

They pulled off the coup by deferring for another day the matter of controlling health care cost escalations which everyone knew would accompany the move.

That other day is here.

Massachusetts will spend $600 million more in 2009 on health insurance than it did in 2006, a 42% bump.

So Governor Deval Patrick has decided to completely overhaul the process by which the state’s insurers reimburse providers.

His proposal emphasizes prevention and chronic disease management in lieu of the current system, which pays fee for service.

If he pulls it off, the achievement would be every bit as audacious as the universal coverage plan itself.

Massachusetts after all, boasts more physicians per capita than any other state, and its vaunted academic medical centers have cut sweet deals with insurers.

Patrick recently chided the latter. “Frankly,” he told the New York Times, “it’s hard for the average consumer to understand how some of these companies can have the margins they do and the annual increases in premiums that they do.”

Patrick’s persuasive powers have worked, at least temporarily. Insurers who want in on the state’s subsidized insurance program submitted bids for 2009 that were so low, officials reported they can keep premiums flat this year.

But policy experts argue that to truly control cost escalations, government needs to cap budgets and yes, ration care.

“Really controlling costs requires just stopping spending,” Brandeis health policy expert Stuart Altman told the Times.

Fifty-three percent of Americans reported cutting back on health care to save money in the past year, according to the most recent Kaiser Family Foundation tracking poll. 

For 35% of them, this meant using home remedies and OTC drugs in lieu of a visit to the doctor.

The same percentage reported deferring dental care. Meanwhile, 21% said they chose not to fill a prescription, and 15% cut pills or skipped doses of prescription drugs.

The poll also revealed that 19% of respondents “experienced serious financial problems recently due to family medical bills.”

A shocking 13% indicate they’ve drawn down all or most of their savings paying off medical bills in the past year. The same number say health care bills make it hard to pay other bills. Twelve percent report being contacted by collection agencies.

Nearly 40% of respondents are very worried about their capacity to pay for needed health care, and that number bumps to 57% in the subset who think someone in the household might lose their job in the next 12 months.

A third of respondents with health coverage worry they will lose it.

“It’s clear that what the public wants most from health reform is relief from health care costs,” concluded Drew Altman, Kaiser’s President and CEO.

“Today’s economic anxieties have created a better starting point for health reform than we saw last time around,” he continued.

“More people see themselves benefiting from reform and fewer see themselves being negatively affected than we saw in the Clinton health reform debate.“

The Kaiser telephone interview survey was conducted from February 3-12 using a nationally representative sample of 1,204 adults.

Like so much else, it began with Viagra.

When Pfizer introduced the blue pill in 1998, British health authorities worried it could wreck its budgetary process. It restricted access to the stuff, which prompted a suit claiming the government’s decision was capricious.

That inspired the government to consider a standardized, transparent approach to rationing medical interventions and a year later NICE, the National Institute for Health and Clinical Excellence was born.

Since then, NICE has received acclaim for limiting health care cost escalations and using evidence-based practices to assure that government spending buys the maximum amount of good quality life.

No one thinks this is easy. The British press is filled with heartbreaking stories of people who cannot access effective cancer drugs for example, but NICE responds that permitting these drugs means sacrificing others that are more cost-effective.

For years the British system was the only one to ration care this way, but spiraling health costs and souring economies have changed everything.

Now according to the New York Times, officials in at least 4 countries, Austria, Thailand, Colombia and Brazil say they either rely on NICE’s decisions or want to establish NICE-like institutions of their own.

Can something like NICE work in the US?

Actually, we may have no choice, according to Mike Leavitt, the secretary of health and human services. If we don’t do something to curb spending on health, it “could potentially drag our nation into a financial crisis that makes our subprime mortgage crisis look like a warm summer rain,” he said.

Cephalon has a great story. Founded 20 years ago, the Frazer, Pennsylvania-based biotech start-up has grown to become one of the top ten biopharmaceutical companies in the world. It has 9 products on the US market, a reputation for creativity, a prodigious pipeline, and revenues exceeding $1.4 billion.

And now that Provigil—the drug responsible for half its revenue is due to lose patent protection in 4 years—Cephalon has begun the next chapter in its story.

We’ve heard this one before. It’s about pricing schemes that wring every red cent out of Provigil and its long-acting offspring, Nuvigil.

Provigil has FDA approval for narcolepsy, obstructive sleep apnea and shift-work sleep disorder. It has also become a popular lifestyle drug that people use to stay sharp at work or wherever.

Twice already this year, Cephalon jacked-up the price of Provigil. It now costs 28% more than it did this spring and 74% more than 4 years ago.

It has done so in anticipation of the spring, 2009 launch of Nuvigil, which had received FDA approval 2 years ago but was shelved by Cephalon as part of its now-unfolding revenue-maximization strategy.

See, Nuvigil will come out cheaper than the now jacked Provigil, so everyone will switch to the new product which enjoys patent protection until 2023. Then, when the generics hit the market, patients and physicians will not be inclined to switch from the convenient long-acting drug to the short-acting generic.

Cephalon talks openly about its perfectly legal scheme. Its VP of investor relations Chip Merritt recently told those attending a conference last month, “you should expect that we will…raise Provigil prices to…create an incentive for the reimbursers to preferentially move to Nuvigil.”

Most insured patients taking Provigil for FDA-approved uses won’t be directly impacted by the price increase, but those who take the stuff for recreational purposes may be left out to dry.

That’s when we learn about price-elasticity for a wakefulness drug that you can’t order with extra foam, whipped cream and caramel drizzle.

In the US, utilization of CT and MRI scanning increased 43% between 2002 and 2007 to 96 million procedures. PET scanning tripled over the same period.

Americans did not get sicker during this time, nor had the medical community been inundated with evidence suggesting the tests were underutilized beforehand. In fact before the most recent imaging fiesta began, experts had estimated that 30% of all scans were unnecessary.

The drivers of inappropriate scanning haven’t changed in 30 years. Patients want the reassurance. Physicians want protection from litigation and sometimes, physicians benefit financially from the tests they order.

This state of affairs is unacceptable for two reasons. First, the scans can cause harm, either by direct radiation exposure in the case of CT, or by obligating risky invasive interventions to track down false positive results. Second, imaging tests are expensive. It costs $228 dollars for a CT scan, $977 for an MRI and $2,000 for a PET.

Health care providers see themselves as guardians of the quality of care, but for the most part their efforts to do so are patchwork and ineffective. There are some guidelines, an occasional implementation strategy, a performance measurement system or two, and a rare link between pay and performance, but the whole thing doesn’t add up as the above statistics suggest.

Yet they howl like coyotes when payers hire radiology benefits managers, known lovingly in the industry as Radiology Police, to oversee the matter. No less than three such organizations, CareCore National, American Imaging Management and National Imaging Associates turn a profit doing just that.

Those profits are a measure of waste in the US health care system.

The situation begs for providers to take ownership of the situation, and now for the first time they have the tools to do so. Plenty of good guidelines are available and EMR systems that support real time, guidelines-based quality checks give providers an unprecedented opportunity. We can do this, guys!