No, your doctor doesn't know what that medication will cost you, either

In seven years of working on CDC grants focusing on improved care of metabolic diseases like diabetes and high cholesterol, I’ve come to think that two broad factors determine the success or failure of chronic disease management. First, doctors must overcome clinical inertia, the phenomenon in which the doctor and the patient follow the easier path in the encounter and generally leave things as they are rather than stop, start, or adjust therapy when indicated. As many as 85% of visits for high blood pressure are affected by clinical inertia, meaning that medications are not adjusted when the patient’s blood pressure, symptoms, or labs indicate that they should be.

Second, patients who are prescribed therapy must adhere to it. Only about a third of patients two years removed from a diagnosis of heart disease are still taking their cholesterol medications, for example, and only about two-thirds of patients with hypertension take their blood pressure medications on any given day.

One of the most significant predictors of medication adherence is cost. High-deductible plans, the old Medicare “donut hole,” high copays, and expensive branded medications have all been linked to lower adherence rates. One potential solution to this problem is good coaching by the physician and better choice of drugs at the bedside, driven by the physician’s intimate knowledge of medication costs. But do doctors really have a grasp on medication costs? A recent study (paywall) suggests, to no one’s surprise, that they do not.

Investigators sent a survey to 900 outpatient physicians (300 each of primary care, gastroenterology, and rheumatology). A mix of 374 responded. The survey contained a hypothetical vignette in which a patient was prescribed a new drug that cost $1000/month without insurance. A summary of the fictional patient’s private insurance information was provided, including her deductible, coinsurance rate, copay, and out-of-pocket maximum. Doctors were asked to estimate the drug’s out-of-pocket cost at four time points in a theoretical year as the patient’s cost-sharing changed due to other medical expenses.

Overall, 52% of physicians could accurately estimate costs before her deductible was met, 62% accurately used coinsurance information, 61% accurately used copay information, and 57% accurately estimated costs once she met her out-of-pocket maximum. (This performance actually exceeded my expectations. Prior to my exit from daily clinical medicine and entree into the benefits game, I think I would have failed most of these tests.) But only 21% of respondents answered all four questions correctly. The docs’ ability to estimate out-of-pocket costs was not associated with their specialty, attitudes toward cost conversations, or other clinic characteristics.

We need to acknowledge that this is a feature of the system, not a bug. Doctors are not trained to be HR professionals. They’re forced into the role. To quote Malcolm Gladwell:

I don’t understand, given the constraints physicians have in doing their job and the paperwork demanded of them, why people want to be physicians. I think we've made it very, very difficult for them to perform their job. I think that’s a shame. My principal concern is the amount of time and attention spent worrying about the business side. You don’t train someone for all of those years of medical school and residency, particularly people who want to help others optimize their physical and psychological health, and then have them run a claims-processing operation for insurance companies.

Many people in the health care industry want the system to stay complex and opaque. That’s why large groups like the AMA and AHA are fighting some of the rules that have come about in the past couple of years. But I hope that your instincts match mine. We have myriad reasons to simplify insurance coverage, but I’ll start with two:

First, by reducing cost and administrative burden, we can make patients more likely to adhere to helpful therapy.

Second, if we can make the system more efficient by eliminating administrative complexity, we can leave doctors, nurses, pharmacists, allied health professionals, mental health professionals, dieticians, and others the brain power to do the work they were trained to do.

We hope you have a happy holiday season!

As the Medical Director of the Kansas Business Group on Health, I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.

63% of What You Pay for Insulin Pays for Something Other Than Insulin

A landmark study (paywall) landed on our doorsteps last week not with a thunderous crash, as it should have, but with a gentle thud. Investigators from UCLA’s School of Public Policy published a cross-sectional analysis of where money paid for insulin actually went in the years 2014-2018.

An accompanying editorial (also paywalled) aptly describes the methodology of this research paper as “daunting,” given the difficulty in getting information in such an opaque marketplace. The investigators had to compile data on 32 separate insulin products from The SSR Health Rx Brand Pricing Data Tool, a commercial pharmacy claims database, CMS records, individual state Medicaid and drug transparency reports, and public filings of participant companies, including not only drug manufacturers, but drug wholesalers, pharmacies, pharmacy benefit managers (PBMs), and insurance companies themselves. Their methodology was complex enough that I’m not sure I completely understand it, and I’m confident I can’t pass it on to you in less than 800 words. So I’m going to get down to the nitty-gritty. First, here is their helpful schematic on the flow of money in the drug pipeline, which I found to be as good as about any explanation I’ve come across:

JAMA Health Forum

You can see that the key breakdowns in this complicated flow of goods and services are at points (2) and (7), where kickbacks from the manufacturer to the PBM (also known as “rebates”) are paid to move a drug up the formulary and where the PBM subsequently passes a share of those rebates on to the benefit plan.

Between 2014 and 2018, the average list price of the 32 insulin products rose 40.1% (inflation over the same period was 5.96%). So the list price of insulin rose eight times as fast as the list price of, say, dishwashers.

At the same time, though, the average net price paid to manufacturers fell by 33.0%. So, for example, Eli Lilly, the oldest insulin manufacturer in the United States, got $69.71 of every $100 spent on its insulin products in 2014. By 2018, they were getting only $46.73 out of every $100 spent.

Similarly, the share going to health plans (as those sneaky “rebates”) fell by 24.7%, and the share of expenditures retained by drug wholesalers increased by 74.7%, from $4.63 to $8.09, although the absolute costs were obviously low in comparison to others in the chain.

Reader, prepare your body for the coming rage (I recommend some light stretching and some John Tesh on the stereo). The share of insulin expenditures going to PBMs from 2014 to 2018 rose 154.6%, from $5.64 to $14.36 of every $100 spent. And the share retained by pharmacies increased by 228.8%, from $6.21 to $20.42.

If you can still read through all the red mist, let me reiterate this: Let’s say that you and your diabetic employee together pay ~$115 to insurance company X in December. Insurance Company X will then take its allowed Medical Loss Ratio of ~$15 and spend the remaining $100 on insulin. Of that $100, the breakdown of who gets what is below:

• Manufacturer: $46.73

• Wholesaler: $8.09

• Pharmacy: $20.42

• PBM: $14.36

• Health insurer: $10.40

Here’s the same information in graphical form, which is helpful to see the change over time:

JAMA Health Forum

Understand that about a quarter of people on insulin–your employees–report routinely skipping doses because of insulin’s tremendous expense. While those people are very likely shortening their lives because they can’t afford their drugs, PBMs, pharmacies, and to lesser extent wholesalers, are taking ever-greater shares of the money that you and your employees pay for the insulin, all while stiffing the manufacturer. I don’t mean to let the manufacturers off the hook; the pharmaceutical industry is the most profitable industry in America by a healthy margin. But we need to recognize that every participant in the distribution system for insulin, from the manufacturer to the PBM to the pharmacy, shares some of the blame for the astronomical increase in price that we’ve experienced over the last decade or more.

Outside of breaking out the pitchforks and torches, what can be done about this problem? A lot, we believe. As we’ve outlined before, you can look at your PBM contract to make sure you have access to your data, that you are allowed to access underlying contracts of your PBM, and that you can get out of your contract in a reasonable amount of time. With that information in hand, you can challenge new clinical approvals for low-impact drugs added to your formulary. You can even buy generics directly from the manufacturer. And, if you’re a member of KBGH, you could immediately cut pharmaceutical costs even without uncomfortable conversations with your PBM by working with our Right Rx program.

As the Medical Director of the Kansas Business Group on Health, I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.

Should we punish people for inappropriate emergency room visits?

On a Saturday morning in November 2016, I woke up with a high fever and a frozen, excruciatingly painful right shoulder. I have a primary care doctor that I trust and like, but she, like most primary care docs, doesn’t work Saturdays. But I’m in the extremely privileged position of being married to a primary care physician (albeit not my primary care physician because that would be weird). My wife examined my shoulder, tsk-tsked my fever, and drove me to her clinic. One of her colleagues in the sports medicine department who happened to be in the building did a quick ultrasound of my shoulder and saw a possible effusion, or excess fluid, in the joint space, and recommended I be admitted to the hospital for a possible “septic joint,” the unglamorous medical terminology for pus in the joint space.

To make a four-day story short, I was admitted through the emergency department, went to surgery, had the shoulder drained, was seen by an infectious disease specialist who ruled out infection, continued to have fevers for a few more days, and left the hospital without a diagnosis, like around 15-20 percent of patients. But my fevers eventually subsided, and I healed up with the help of physical therapy. The problem hasn’t recurred.

I subject you to this story because I’m curious whether a modern insurance company would have considered my emergency department visit “appropriate.” I was clearly in distress. But to this day I have no diagnosis to explain my symptoms, and I can only assume that I would have eventually returned to my baseline state of health had I sweated out my fevers at home and taken over-the-counter pain medications for my shoulder.

But that’s all hindsight. My presentation really was worrisome for a septic joint, and when a patient presents with that diagnosis, we have maybe 24 hours to offer treatment before the infection causes irreversible damage.

United Healthcare, the largest health insurance company in America, decided a few months ago to start vetting emergency room bills, with the possibility of not covering a claim if the reason for the visit was not eventually deemed an emergency. Unsurprisingly, this caused an uproar not only among patients but understandably among doctors and hospitals as well. The doctors and hospitals don’t control who comes in the door, after all. They just take care of whoever walks in and try to cover the fixed costs of having a functioning 24/7 clinic open to the public. And as inefficient as emergency care can be, discouraging it could have the unintended consequence of diverting people away from needed care, and most patients already have a strong disincentive for ED use because of high-deductible plans and cost-sharing. And contrary to popular belief and the policy direction of many employers, Americans don’t actually overutilize care in comparison to patients in peer countries. So United Healthcare ultimately announced it would delay (but not abandon) implementing the new policy until after the COVID-19 pandemic has passed. (Anthem attempted a similar policy several years ago, but it is still tied up in litigation.)

On the other hand, though, it is generally accepted that the ED is a more expensive care environment than, say, a primary care doctor’s office. So if unnecessary ED visits could instead be diverted toward primary care visits, United Healthcare could save money and theoretically pass those savings on to everyone in the form of lower premiums.

So I was really interested to see Dylan Matthews’ analysis of the role of excess emergency department use in driving up healthcare costs. I cannot find a good link to his article; I got it via an email newsletter. So I’m going to do my best to outline his findings without committing outright plagiarism.

In short, Matthews found in speaking to a half-dozen healthcare finance experts from Harvard, Rutgers, and other institutions, that there is no evidence that reducing emergency department visits explicitly to save money actually works. This is, according to the experts, because rates of ED utilization have actually been steady for the last several years, and have actually dropped during and post-COVID-19. The problem with the ED, like with most of American medicine, is not utilization, but cost. And implementing a post-hoc vetting process like United Healthcare is proposing makes vulnerable patients the middle man in an astonishingly complex transaction. Some studies, like this one from 2017, show that incentives can provoke a small diversion toward primary care and way from the ED, but total costs don’t decline because the inpatient cost of the ED visit is simply shunted toward increased outpatient utilization. My personal caveat to this finding is that primary care is generally cost-effective in the long run, and that early intervention in the primary care setting is likely to lead to better outcomes. Short-term studies like the 2017 paper above don’t have the duration to detect this.

UHC and Anthem will presumably, sooner or later, get these policies going, and that will kick off a natural experiment that eventually tells us whether the policies do what they’re intended to do--decrease cost by decreasing ED use--or whether patients are harmed. What we unequivocally know is that the policies will lead to patients trying to decide if their problem is really an emergency. Is that chest pain because of your extra fries at supper, or is it a heart attack? Is that shoulder pain and fever a mystery that will never kill you, or do you really have a septic joint? It’s too early to predict what the effect of this will be. In the meantime, though, as we’ve mentioned many times before, the best way to optimize your employees’ care is to make sure they have good, low-cost access to a primary care practitioner.

We hope that insurance companies and other players in the health care marketplace can come up with more innovative ways to control cost, like addressing the outrageous prices charged for services compared to other countries, and spare patients the task of being their own health care providers and worse, small-claims adjusters.

As the Medical Director of the Kansas Business Group on Health, I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.

How Do Doctors Self-Refer?

In my full-time clinical practice days, other practitioners often referred patients to me for accidental findings on x-rays, ultrasounds, or MRI exams. Sometimes a patient would have had a CT scan of her abdomen that revealed an asymptomatic tumor inside her adrenal gland. More often, an ultrasound of the carotid arteries or an MRI of the spine uncovered a mass within the thyroid gland. This phenomenon is so common that these discoveries have a name: “incidentalomas.” Never accuse doctors of not being wordsmiths.

For thyroid incidentalomas, I would usually drag a portable ultrasound machine into the patient’s room and get a quick look at the lesion with my own eyes. Through reasonably straightforward criteria, the patient and I could choose whether or not to biopsy, to repeat an ultrasound in a year or two, or to forget we ever saw the lesion. I never charged extra for these informal bedside exams. I considered this particular use of the ultrasound machine akin to a 21st-century stethoscope. I wouldn’t charge a patient an additional fee for listening to her heart or lungs, so it didn’t seem proper to charge them for this use of ultrasound. That wasn’t charity on my part; this philosophy is becoming so prevalent as to have guidelines crop up around it.

But sometimes, I saw features in a thyroid nodule or a lymph node that made me think the lesion should be biopsied, usually by me. And I was paid well for these procedures (technically, the University of Kansas was well-paid since I was salaried. I made the same amount of money whether I did the procedure or not). A thyroid biopsy, which takes maybe ten minutes, pays about the same amount as caring for a diabetic patient for a year (thank the RUC). The revenue from diagnostic studies comes not only from the professional fee, which pays the doctor for her interpretation and consulting regarding the study but also from a “facility fee” meant to cover technical costs surrounding the maintenance and use of special equipment. A physician who owns the equipment needed to perform labs or imaging can profit by collecting both of these fees. So the incentive for me or any other doctor to do imaging or procedures in our own practices–so-called “physician self-referral”–is considerable.

Stark laws arose a few decades ago to discourage physician self-referral and kickbacks from referrals to other physicians, but they made specific exceptions to allow “necessary testing” in physician offices. Once upon a time, the American Medical Association Code of Ethics prohibited doctors from owning imaging or lab equipment. The AMA said doctors should not have a financial interest in testing. But that rule eventually changed, and now, the AMA is much softer on physician-owned testing, insisting only that doctors make diagnostic and treatment decisions without taking financial issues into account. The trouble is, from a financial standpoint, that philosophy probably doesn’t work.

Doctors are human, and physician-owned imaging and lab centers unequivocally appear to drive up the cost of care by increasing the likelihood of getting additional procedures without improving outcomes. In a tiny sample of the literature on this topic, a group of researchers has shown that MRI scans of the neck, lower back, knee, and shoulder, when performed in physician-owned machines, are much more likely to be normal, indicating overuse by the physicians who own the machines and bill for their use. Multiple studies show that physician-owned hospitals are associated with an increase in spending without a corresponding increase in quality, a phenomenon that leaks into the outpatient setting as well. For example, physicians, particularly those treating immune or malignant diseases, routinely sell drugs to their patients at a small markup. Some physicians make more of their income from such practices than they do by seeing patients. Their incentive is naturally toward using more expensive drugs, whether they consciously intend to or not.

This is the part of the post where I propose a brilliant policy strategy. Except I’m not sure there is one, apart from the transparency rules we’ve discussed at length on this blog. Physician-owned testing, after all, does come with some benefits. Patients can often get the test performed on the same day and in the same location. Since doctors are so powerful, there’s likely not a movement afoot to take their radiology machines away.

But by using more direct contracting with physicians, we could limit the incentive for doctors to overuse certain diagnostic and therapeutic procedures. If I had been paid a flat monthly rate to take care of the endocrine needs of Corporation X in my example in the intro, I would have simply done the necessary procedures on patients without even thinking of the cost to the employer or the patient or thinking of my potential income. The few hundred bucks I might have made from a couple of thyroid biopsies would have been folded into my fee for caring for the entire population.

If you have past experience with direct physician contracting (or with frustrating up-charges from doctors self-referring), please let us know. We would love to better understand the experiences of our members around this issue.

As the Medical Director of the Kansas Business Group on Health, I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.

Health Care Proxy Shoppers

Over the weekend, I was listening to some health policy podcasts while gardening, as one does, and the surgeon and medical waste researcher Dr. Marty Makary was interviewed on Freakonomics. He mostly didn’t talk about surgical techniques or hardcore quantitative measures of wasted health care dollars, though. Instead, he outlined his mother’s strategy in grocery shopping. Mrs. Makary is a bargain shopper. While I might just grab a couple of lemons from whichever store I’m in when I think of it, she carefully compares prices between stores and buys the cheapest option. People like Dr. Makary’s mom make up only 10-20% of all shoppers, he said, but they hold down the price of lemons for the rest of us. Economists call them “proxy shoppers.” Just like proxy voters, they make decisions about the cost of lemons for all of us.

Dr. Makary shared this vignette to illustrate how price transparency may help contain costs in medicine. It got me thinking: Who are the proxy shoppers in medicine? Price transparency is increasing, after all, but patients still don’t use it as much as one might expect. And while there are ways to encourage patients to use price transparency, especially as it relates to their out-of-pocket expenses and deductibles, ultimately, the contract they’re working with barely involves them. As Larry Van Horn says in the Freakonomics episode, business-to-business contracts in medicine between a payer and a health system include a third party (the patient) who has no say in the contract at all.

So the proxy shoppers in medicine mostly are not patients. The actual proxy shoppers are the people most likely to be reading this blog post, like the HR professionals and benefits specialists who plan, coordinate, and pay for their employees’ health care. And we should use our power as proxy shoppers carefully.

That’s it. That’s my post. I don’t mean to be a downer. I know you have a lot on your plate already, trying to manage the benefits of dozens or hundreds or even thousands of employees’ benefits. But the next time you sit down to negotiate a contract, I hope this is in the back of your mind: You have a power like almost no one else’s to hold down the cost of medical care in a country where it’s genuinely out of control. You can pick up the lemon that’s closest to you and pay whatever it costs, or you can check the price of that lemon in the grocery store down the street.

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.

Congress Bans Surprise Bills (mostly)

On Super Bowl Sunday my son managed, in that mysterious preteen boy way, to break his leg while snow sledding. We went to the emergency department and received good, straightforward care. His leg was splinted and his pain was controlled in time for kickoff. He’s healing up nicely.

But now my family has a pendulum swinging over its head. Will we get a bill that is as straightforward as his care was, or will we get a set of “out-of-network” bills, even though the emergency department we went to was considered “in network” (we checked)?

This is no hypothetical threat. Hundreds of thousands of Americans get stuck with out-of-network bills from emergency departments, often for tens or even hundreds of thousands of dollars, because of a sinister business model being advanced by private equity firms. Those firms have twisted this quirk of American medicine, where a doctor working in an in-network hospital can be considered out of network, into a profitable business model in which they buy physician groups and intentionally move the providers out of network. It’s exasperating not only for its shadiness, but for the fact that the out of network doctors often charge rates far above what insurance companies are willing to pay. And it works: as many as one in five ER visits have surprise bills attached to them.

But late in 2020 Congress did something that seems like an obvious bipartisan win for everyone involved, but which was kept from happening for a depressingly long time by lobbying from those same private equity firms: they banned surprise medical billing. Some are calling it “Sarah Kliff’s Law,” after the former Vox, now New York Times, reporter who asked people to send her outrageous examples of this kind of behavior over the last few years.

The law requires insurers and medical providers who cannot agree on a payment to, instead of just mailing out outrageous bills destined to be sent to collection agencies, use an outside arbiter to settle on a fair fee. The fee is based mostly on typical payments for similar services. Then the patients can be charged the same cost-sharing they would have paid for in-network services, and no more. The most powerful effect of the law may be in avoiding arbitration altogether; the New York Times reported last winter that, in the dozen or so states that have set up their own arbitration systems like this prior to Sarah Kliff’s law, most price disputes get successfully negotiated before an arbitrator is even involved.

The law is not perfect. It doesn’t take effect until 2022. And while it will apply to doctors, hospitals, and air transport (which can generate particularly huge bills), it excludes ground ambulances even though a majority of ambulance rides nationwide generates an out-of-network bill. Sarah Kliff herself reported that the omission was due to lawmakers’ fear that untangling the complex local and federal regulations around ambulance services would have delayed or killed the entire bill. If you’re an optimist, you’ll predict that Congress will take up the ambulance issue separately in the future. If you’re a pessimist, you’ll predict that private equity firms will simply move their money away from ER physician groups and toward ambulance services.

Learn more about this kind of skullduggery and what you can do to fight it in the KBGH Book Club.

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.

How to Get Your Employees to Take Advantage of Price Transparency

In the KBGH Book Club we’ve gone through the “What’s wrong with this situation?” phase, and we’re just entering the “What can we do about this?” phase. A solution that is proposed again and again in this book and in the benefits world in general for controlling costs in medical care is price transparency.

In theory price transparency works like this: since most of the medical care that we receive is non-urgent, we should have time to compare prices. So if only the price of, say, an elective knee MRI at several locations was published on a website, we could simply compare the different radiology practices, choose the lowest price, and go to that practice for our MRI. There is some evidence to support that this works. My favorite study, which I wrote about in a previous blog post, showed that parents choosing a treatment for their child’s appendicitis still mostly chose the cheaper option when they were given cost information, even though it affected their insurance payment more than their out of pocket cost.

Because of this, and because of an Executive Order President Trump signed on October 29, 2020, CMS and the Departments of Labor and Treasury have issued a final rule that will, for the first time, require most private health insurance plans to do two things:

1. They will have to provide personalized cost-sharing information to patients.

2. They will have to publicly report negotiated prices for specific health care services through an online tool. The tool initially will be required to have the ability to compare rates and out-of-pocket expenses for 500 of the most common labs, visit codes, and procedures (deadline January 1, 2023). Starting January 1, 2024, these tools must report this cost information for all health care services. Legal challenges to these rules will undoubtedly continue (not everyone believes, as we do at KBGH, that transparency = trust). But barring a truly explosive set of judicial rulings, we can expect a great deal more price transparency moving forward than what we have now.

Unfortunately, as Jeffrey Kullgren and Mark Fendrick note in a recent editorial (paywall), transparency tools have not yet been shown to reduce overall spending, even when patients are paying pre-deductible prices, when they should be most sensitive to prices. Multiple phenomena may account for this. Patients may simply have too many choices (the old “too much jam” phenomenon). Some patients may assume that less expensive options are of lower quality. Patients may simply not know when more than one option is available. Kullgren and Fendrick make several suggestions on how to make the new price transparency rule work:

1. Make sure employees know that health care services are “shoppable.” We’ll all have to sell patients on the idea that the information is “trustworthy, reliable, and worth using,” as the authors say. This will mean working with our insurance partners to make sure those things are true. Relying simply on the fantasyland “chargemaster” prices for hospital services, for example, will undoubtedly make employees skeptical or cynical about the process.

2. Many employees will need guidance on how to best use the transparency information. A specific example given by Kullgren and Fendrick is direction on when prices could be most helpful. Planning a knee replacement in a few weeks or months, for example, is a good use of pricing information. Trying to price shop after a diagnosis of a potentially life-threatening cancer requiring urgent treatment, though, is clearly not a good practice, in spite of what my favorite parents-cheaping-out-on-their-sick-kids study above may say.

3. On the provider side, we need to continue moving away from fee-for-service reimbursement models and toward quality-driven, alternative payment models. Much of this movement is happening on the public side in Medicare and Medicaid. On the employer side, a move toward more direct contracting with providers could be a good way to accomplish this.

4. Employers need to work with professional societies (like the Medical Society of Sedgwick County, with whom KBGH is allied) to continue to advocate that cost containment is a core professional responsibility of modern medical providers. Integrating cost information into the medical record like the Veteran’s Administration does for drug pricing may be a good practice.

5. We need to pressure different health systems to adopt electronic health record interoperability standards so that, when patients use price information to seek services at alternate facilities, their care won’t be fragmented between doctors that can’t access the same information.

How do you propose we nudge our employees toward taking advantage of price transparency moving forward? We’d love to hear your ideas!

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.

Introducing Advanced Primary Care

In the last couple of years, we’ve tried to drive home a couple key points about the routine medical care of your employees:

First, even though annual “check-ups” may not be that important, steady access to a primary care provider is essential. Access to primary care increases the life expectancy of a community. Primary care visits are declining, being crowded out by visits to retail clinics, urgent care centers, emergency rooms, and specialist visits.

Second, primary care is the most cost-effective form of health care, and to avoid unnecessary costs, most of your care should be coordinated through a primary care provider. American adults who have a primary care physician may have healthcare costs as much one-third lower than the costs of their peers who lack a PCP. Almost two-thirds of Medicare claims for wasteful or unnecessary care are by physicians with no relationship to the patient’s primary care practitioner.

But it’s possible that even with those assertions we’re thinking too small. KBGH is a member of the National Alliance of Healthcare Purchaser Coalitions (say that three times fast), and they have adopted the provocative stance that simple access to primary care isn’t enough. The Alliance has begun advocating for “Advanced Primary Care.”

If you’re a provider, you might cringe at the name. Isn’t the “advanced” part insulting to a seasoned, experienced, competent doctor who does “regular” primary care? Names are tricky. But the name isn’t meant to connote the achievement of a certain score on board exams or the possession of a special skill set. Instead, Advanced Primary Care, as defined by the National Alliance, describes a philosophy and commitment to seven key, sometimes overlapping, attributes in the clinic: 

1. Enhanced access. Many patients end up in the emergency department simply because they could not access their primary care practitioner during normal business hours or they got frustrated by the time it takes to schedule and complete a visit. Primary care practitioners who offer available appointments on nights or weekends can reduce emergency room utilization.

2. Increased time with patients. The average fee-for-service primary care physician carries a patient panel of roughly 2,200 patients. In models in which the physician or practice directly contracts with employers, this number may be more like 400-600 patients. This allows additional time with each patient to encourage better engagement, to better identify social determinants of health, and to relationship-build to ensure continuity of care over time.

3. Realigned payment methods. Much of the current fee-for-service model perversely incentivizes increased care or increased volume without increased quality of outcomes. Advanced primary care, which operates more frequently on a salaried or subscription model, seeks instead to incentivize patient activation, case and care coordination, accountability for health outcomes, and judicious use of downstream referrals.

4. Organizational and infrastructural “backbone” to support patient-centered leadership, additional training for staff when needed, and commitment to quality improvement over time. This may mean changes in the practice’s staffing and use of information technology.

5. Behavioral health integration in order to deliver “whole person health,” not just physical health. This can be in the form of a social worker, therapist, or psychologist on site or coordinated via telemedicine.

6. A disciplined focus on health improvement, not just reactive care, with a deep understanding of population risk factors and a strategy to focus resources within that population to where they will drive the greatest overall improvements. Advanced primary care seeks to anticipate problems like seasonal influenza, not just respond to crises that arise from those predictable problems.

7. A process of referral management to other providers or services, like specialist physicians, labs, radiology departments, and allied health, that explicitly seeks to maximize quality while moderating downstream cost.

The National Alliance has a good infographic on Advanced Primary Care below. If you’re interested in exploring direct contracting with primary care providers for your employee benefit package, please let us at KBGH know. We would love to help out.

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.

Amazon is a pharmacy now. Is that a good thing?

Amazon is now in the pharmacy business

Amazon announced just before Thanksgiving that it was entering the pharmacy business. On its face, this is a good thing. Amazon has grown so large that it is a de facto arm of the federal government, and it is incorporated as much as utility companies into many of our lives. The move isn’t sudden; some analysts have framed this as a natural extension of their 2018 purchase of PillPack, a pharmacy service to coordinate, organize, and deliver prefilled medication containers. So we can be confident Amazon will offer efficient, seamless delivery and good prices, two things that are often missing from our experience in American health care. It’s no surprise, then, that the announcement was catastrophic to the stock price of several pharmacies whose shares fell by a tenth or more. GoodRx, a quasi-pharmacy benefit manager (PBM) designed for discounts for uninsured and underinsured patients, lost a fifth of its value.

How it works

Amazon Prime customers will get medications delivered for free within two days. They’ll also qualify for discounts of up to 80 percent off generics and up to 40 percent off brand-name drugs. (some have pointed out that people who can’t afford Prime will be cut out of these offerings, an example of a systemic problem in American health care that Amazon won’t or can’t fix)

I did a quick road-test of Amazon Pharmacy today. The interface is, as one would expect, pretty intuitive and slick. If nothing else, Amazon has mastered simplicity. Just by seeing my routine demographics and the last four digits of my social security number Amazon was able to find my insurance information automatically, a task which I can tell you from both the physician side and the patient side is not easy. Then, after entering medications I currently take, I was given the option of transferring those prescriptions from my current pharmacy. I did not do this (my commitment to this project only goes so far), but it looked like the process would have been seamless on my end. I do not know what nightmarish snarl of paperwork it may have generated for my existing pharmacy or my doctor, though.

Allegedly, were I to have gone ahead and tried to check out, I would have been shown two prices: one with my insurance benefits, and one with my Prime discount. I would have chosen my preferred price, and the medication would have been delivered within two days. It remains to be seen how Amazon Pharmacy would handle one-off prescriptions for an infection or injury, although their same-day delivery in cities and by drone aircraft point toward that being a future feature.

Where do pharmacists fit in?

But the practice of pharmacy is more than the cheap, reliable delivery of medications. We at KBGH see pharmacists not as people who take pills out of a big bottle and put them into a small bottle to sell to you, but as highly trained medical professionals [note: KBGH has CDC funding to promote, among other things, team-based patient care including pharmacists]. Pharmacists’ training is toward the upper end of medical professional training in terms of time and testing requirements. After a minimum of two years of undergraduate classes with strict prerequisites (and some schools require additional coursework), pharmacists since 2000 have universally completed a Doctor of Pharmacy (Pharm.D.) degree, a four-year professional degree program which makes them eligible for licensure by their state Board of Pharmacy. The Pharm.D. degree is often followed by one or two years of a postgraduate residency program to increase the pharmacist’s depth of knowledge in a specific area of focus like inpatient care or chronic disease management. Pharmacists interested in research may do fellowship training beyond residency.

Pharmacists, like physicians, utilize “extenders” and technologies to increase their capacity. This theoretically allows pharmacists to spend more time on direct patient care roles like providing evidence-based medication recommendations, monitoring therapeutic responses to drugs like anticoagulants and blood pressure medications, and reconciling medications as patients transition from one care setting to another.

Pharmacists are capable of contributing to extraordinary patient outcomes. A meta-analysis of randomized trials, for example, showed that pharmacist + physician dyads are much more effective than physicians alone in treating patients’ cardiovascular risk factors. Teams with pharmacists had patients with blood pressures 8.1 mmHg lower, bad cholesterol levels 13.4 mg/L lower, and a 23 percent lower likelihood of smoking:

Some pharmacists, in collaboration with other practitioners, offer testing for high blood pressure, infections like strep throat, and markers of chronic disease management like cholesterol and blood sugar levels. In 2015 the State of Kansas authorized the creation and use of “Collaborative Practice Agreements” between pharmacists and physicians for patient care. Amazon Pharmacy has promised to try to virtually recreate the “counter conversation” with the pharmacist that many people desire, so while it is hard to see Amazon tiptoeing into the collaborative practice water any time soon, it is not impossible to imagine long-term. Amazon already offers telemedicine to its employees. Expect telemedicine for the rest of us next. And expect those telemedicine providers to work with Amazon Pharmacy somehow as the company learns what it takes to provide more comprehensive physician-pharmacy services. Maybe PillPack’s existing expertise in counseling will translate into more traditional brick-and-mortar pharmacy-style interactions. With time, it seems inevitable that Amazon will be labeled a preferred pharmacy for most health insurance plans. After that, it will surely follow CVS’s lead and become or acquire a PBM.

Staying out of stores is unquestionably safer in the COVID-19 age, a system-delivered advantage for Amazon. So if your employees begin using Amazon Pharmacy I’d make sure they know some basics, like that if they opt not to use their insurance but instead just take the Amazon Prime discount, their purchase may not count toward their health insurance deductible.

But for now, for complex patients with complex medication regimens that include potentially dangerous, potentially interfering drugs, the use of a community pharmacy familiar with your employees seems the most prudent course. Many community pharmacies already offer delivery and PillPack-like services designed for ease of drug administration, all with a more recognizable over-the-counter pharmacist interface. Grocery stores adapted when Amazon bought Whole Foods, and I would expect pharmacies to do the same.

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.

American Healthcare Primer, Part Two: Private Insurance

This is part two of a series on American healthcare. It may make more sense if you start with Part One.  As with Part One, much of this information comes from Ezekiel Emanuel’s Which Country Has the World’s Best Health Care?

 Where does money come from?

Of the United States’ about 325 million people, around 180 million are covered by employer-sponsored health insurance, accounting for approximately 20% of health care spending. Employees pay on average 18% of the cost of their premiums for individual plans and 31% the cost of their premium for family plans, equivalent to about one-third of median income. Employers pay the remainder of the premiums as a form of tax-exempt reimbursement. To some extent, employer contributions to insurance are taken from wages; it is widely acknowledged that employees would make more if their employers were not covering their health insurance.

More than half of employer-sponsored insurance prices are determined by insurance brokers working on commission. This system incentivizes brokers to negotiate higher rates. Some brokers are now working in other models like “pass-through” in order to minimize that incentive.

Another 22 million people purchase health insurance individually, 11 million of those through “exchanges” set up by the ACA. Eight million people receive insurance subsidies that were once paid for by the federal government. But after the recent discontinuation of these federal subsidies, insurers–still required by law to provide subsidies–were forced to increase premiums on non-subsidized patients in order to cover the cost. Overall, individuals pay for about 28% of all health care spending.

Roughly 28 million Americans, most of them between the ages of 20 and 40, have no health insurance. A small number of uninsured patients receive care through subscriptions to physician practices in a growing model called “Direct Primary Care.”

Where does the money go?

As with public insurance, hospitals consume about a third of spending. In most private insurance, both individual and employer-sponsored, payments to hospitals and physicians are negotiated individually and tend to be roughly two to three times rates paid by Medicare.

Like in public insurance, hospitalizations are covered according to “Diagnosis-Related Groups” (DRGs), fixed, pre-specified amounts paid according to the diagnosis codes attached to the hospitalization. Unlike public insurance, the rates paid for any given DRG can differ by many multiples. The highest rate a given hospital receives from any payer for a given DRG is known as the “charge master” price, and it tends to be exorbitant; when you hear about sixteen-dollar Tylenol or similarly absurd prices on the evening news, it is the charge master price that is being cited. Medicare rates are roughly 31% of the charge master rate.

Physician payments, as in public insurance, consume about 20%, of all health care spending. Commercial insurers base their payments on a multiple of the CMS Physician Fee Schedule.

Pharmaceuticals consume about 17%, of all health care spending and are considered the first- or second-most egregious source of excess spending (behind administrative complexity) in the American health care system. Pharmaceutical prices are not set solely by drug companies. Pharmacy benefit managers, or PBMs, are companies that manage prescription drug benefits for commercial health plans and self-insured employer plans, along with public insurers. PBMs have three revenue sources: supply chain fees paid for the work of managing the benefit plan, which is uncontroversial; “Spread pricing,” a controversial tactic in which the PBM keeps the difference between manufacturer and insurer prices for a drug; and manufacturer rebates, in which a fraction of the cost of the drug to the consumer is transmitted back to the PBM so that the manufacturer’s product can obtain preferred formulary placement over the products of competitors. Rebates have grown in magnitude out of proportion to the health care economy. Insulin has a typical rebate of 66%, for example. As such, revenues of PBMs exceed even those of the pharmaceutical companies with whom they negotiate. In 2017, Express Scripts’ revenue was roughly $100 billion. Pfizer’s revenue was $52 billion.

Outpatient pharmaceuticals are typically covered according to a tiered pharmacy benefits plan, with Tier 1 generic drugs costing ~$10/month, Tier 2 preferred branded drugs costing ~$35/month, Tier 3 non-preferred branded drugs costing ~$70/month, and Tier 4 specialty drugs often being covered under a “coinsurance” model of ~25% patient payment.

Dental and vision care

Private insurers cover dental and vision at varying rates. Most patients have supplemental insurance for this purpose.

Long-term care

Private insurers do not, for the most part, cover long-term care, and long-term care insurance is rare, with only 0.5% of employers offering it. Fewer than 10% of employees nationally have long-term care insurance, in spite of the ~$90,000 annual cost of nursing home care and projected steep rise in need in the next few decades.

Administrative complexity

The United States has much higher administrative cost and complexity than peer countries, owing to a patchwork of private insurance plans with few harmonized features. Overall overhead is 8%, but this rises to 14% if private insurance-related activity is included. Ten other wealthy countries average 3% overhead. We spend roughly four times what Canada spends on administrative overhead, for example. The $812 billion per year we spend on administrative overhead exceeds the entire budget of Medicare.

What do we get from our health care spend?

Medical innovation, at least in terms of new drugs, therapies, and surgeries, is quite high in the United States. America is first in the world in clinical trials, number one (by far) in Nobel Laureates in Medicine, number one in medical patents awarded.

That said, health outcomes in the United States generally lag behind peer countries. We have far more uninsured patients. We have the highest maternal and infant mortality rates in the developed world and the lowest life expectancy. We are in the bottom third of developed countries in happiness.

Our excess costs are not related to utilization of medical services, but rather to inflated prices. All excess cost of pharmaceuticals in America is due to higher prices than in other countries, not increased use. Rates of hospitalization and the length of stay of those hospitalizations are lower in American than in most peer countries.

Pre-pandemic, Bloomberg rated American health care as 35th best in the world, between Costa Rica and Bahrain. In 2000 the World Health Organization ranked the United States 37th (again, ironically, just behind Costa Rica).

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.

American Healthcare Primer, Part One: Public Insurance

With the pending transition in Presidential administrations and a historic pandemic killing more than 1,300 Americans daily, we are in for a lot of health care policy talk over the next few months. To refresh our fund of knowledge about American health care, we at KBGH have decided to outline the big features over a series of posts. Much of this comes from Ezekiel Emanuel’s excellent Which Country Has the World’s Best Health Care?

Contrary to popular media, there is no “American Health Care System.” Instead, we have a patchwork of independent and overlapping systems, each with its own problems, bright spots, and idiosyncrasies. This week we’ll cover public insurance.

What do we spend on health care?

The United States spends more than $3.5 trillion annually on health care, equivalent to about 18% of gross domestic product, accounting for almost $11,000 per person. This is roughly double the per-capita average of Organization for Economic Cooperation and Development (OECD) peer countries like Japan and western Europe.

Where does money come from?

Roughly 45% of American health care is publicly financed: 28% federally and 17% by state and local governments. Medicare costs almost $600 billion per year, or 2.9% of gross domestic product (GDP), and covers 55 million senior and disabled Americans. Medicare Part A, covering hospitalizations, is funded by a 1.45% payroll tax from employers along with a 1.45% payroll tax from employees (plus another 0.9% payroll tax for individuals earning >$125,000 or couples earning >$200,000 annually).

Optional Medicare part B, covering physician visits, is financed by income-linked premiums averaging ~$130 per month for people who elect for the coverage. The premium covers ~25% of the cost, and the federal government covers the remaining 75%.

Medicare part C, or “Medicare Advantage,” can charge enrollees additional premiums.

Medicare part D is paid for by premiums paid by elderly beneficiaries and by other general governmental tax revenue.

Medicaid and the Children’s Health Insurance Program (CHIP) collectively cover 65 million mostly poor patients along with certain blind and disabled persons. Some beneficiaries are “dual-eligible,” meaning they are also covered by Medicare. The federal government pays ~57% of the cost of traditional Medicaid as the “Federal Medicaid Assistance Percentage,” while states cover the other ~43%. Medicaid accounts for 1.9% of GDP, or roughly $400 billion per year from the federal government. In many states Medicaid is the single largest fraction of the state budget. In expanded Medicaid under the ACA, in which Kansas does not participate, 90% of the cost is borne by the federal government with 10% borne by the state to cover patients whose income falls up to 138% the federal poverty line.

Kansas uses a “managed” form of Medicaid in which Medicaid is facilitated through third-party payers (Sunflower Health Plan, UnitedHealthcare Community Plan of Kansas, and Aetna Better Health of Kansas).

In Kansas MediKan covers adults with disabilities who do not qualify for Medicaid but whose applications for federal disability are being reviewed by the Social Security Administration. MediKan covers a scope of services similar to that covered by Medicaid, but with additional restrictions and limitations.

CHIP provides health insurance for children whose parents make too much to qualify for Medicaid but whose private health insurance does not allow them to get their children insured. CHIP is not open-ended like Medicaid, but is rather a block grant system varying slightly by state. The federal government pays 72% of the cost up to a year’s maximum allotment, and the State provides the remaining 28%.

The Veterans Health Administration (VA) covers 9 million former military service members. 2.2 million people of Native American descent are insured through the Indian Health Service (IHS). 9.4 million active-duty military and their families are covered through Tricare.

Where does the money go?

About 85% of health care spending is for chronic conditions like diabetes, hypertension, chronic obstructive pulmonary disease, and high cholesterol. About a third of patients with a chronic medical illness also have a comorbid psychiatric disease like depression or anxiety. This is thought to increase the cost of care of those patients by 60% or more.

Hospitals consume about $1.1 trillion, or 33%, of all health care spending

Medicare Part A covers hospitalizations. Hospitalizations are covered according to “Diagnosis-Related Groups” (DRGs), fixed, pre-specified amounts paid according to the diagnosis codes attached to the hospitalization. Medicare’s DRG rates are set by the federal government. Medicare does not negotiate DRG payments; hospitals may take them or leave them. But Medicare does adjust the base DRG rate via special payments to rural and other hospitals, via “Disproportionate Share Hospital” payments to hospitals who provide a large volume of uncompensated care, and via two forms of additional payment to hospitals who provide graduate medical education to resident physicians.

Hospitalizations in Medicaid are covered according to DRGs, with prices set by the states.

The VA owns its own hospitals.

Physician payments consume about $700 billion, or 20%, of all health care spending

American physicians are well-paid: primary care doctors like family physicians, pediatricians, and internists make an average of $223,000 annually, and specialists make an average of $329,000, though that number is inflated by the relatively large salaries of proceduralists like cardiologists and orthopedic surgeons who make roughly five times what peers in other developed countries earn.

Nurse practitioners make an average of $105,000 per year.

Public insurance payments to physicians differ markedly by specialty. Pediatricians make a large fraction of their income from Medicaid, since more than a third of American children are on Medicaid at any given point. Cardiologists, who treat a predominantly elderly population, make the majority of their income from Medicare.

The DRG payment mentioned above does not cover physician costs in either public or private insurance; physician services are billed separately under “Common Procedural Terminology” (CPT) codes. Most ambulatory and inpatient physician payments are still fee-for-service, with “Relative Value Units” (RVUs) converted by each insurer. The purpose of RVUs is to create a common metric to measure physician services based on the time, skill, and intensity of physician work along with practice expenses and malpractice premiums. One RVU via Medicare is worth about $36. After conversion, that $36 becomes about $56 for an office visit and about $77 for a gallbladder surgery (procedural skills are generally more valued than medical skills in the system).

The Relative Value Scale Update Committee (RUC), a 31-physician panel owned and organized by the American Medical Association, assists the Centers for Medicare and Medicaid Services (CMS) with assigning and updating RVUs. The RUC guides ~70% of all physician payment in the United States, equal to an estimated $500 billion each year. Its recommendations are made based on survey results of only about two percent of physicians updated only every 5-20 years, but RUC recommendations are accepted without change by CMS more than 90% of the time.

Physician payments are still mostly fee-for-service with RVUs converted by the federal government, but alternative payments models developed through The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), like capitation, bundled payments, and global budgets, are growing in utilization, currently making up about a third of all payments.

Medicaid physician payments are mostly fee-for-service with an RVU conversion set at the state level, but managed Medicaid providers are experimenting with “capitated” payments, in which a lump sum payment is paid to the physician to encourage reduced overall spending.

The VA and IHS employ their own physicians on salary.

Pharmaceuticals consume about $500 billion, or 17%, of all health care spending.

Drug prices in the United States are 56% higher than in peer European countries and represent our single biggest source of excess health care spending. Americans make up only 4% of the world’s population, but we account for almost 80% of pharmaceutical revenue. Pharma companies point to spending on research and development, but those budgets are dwarfed by advertising budgets. Pharmaceutical and health product manufacturers account for 7.3% of all lobbying money spent in the US, while no other sector accounts for more than five percent. Pharma is by a large margin the most profitable business sector in America.

Of the 17% of the health care budget consumed by drugs, 10% is in the outpatient setting and 7% is in hospitals, nursing homes, or doctors’ offices.

Some drugs, though, are not sold through pharmacies, but through physician offices as part of the “buy-and-bill” system. The most prominent example is cancer chemotherapeutics. Medicare caps physicians at billing six percent higher than the average wholesale price. This incentivizes physicians to use more expensive drugs to generate higher payments.

Medicare part D pays for pharmaceuticals. It is forbidden by law from directly negotiating drug prices, but is allowed do negotiate indirectly through a pharmacy benefit manager (PBM). Pharmacy benefit managers create formularies and negotiate prices in both private insurance and in Medicare. They may limit drug choices in all but six categories: immunosuppressants (as might be used in autoimmune diseases or organ transplants), antidepressants, antipsychotics, seizure medications, HIV medications, and cancer drugs.

Medicaid covers drugs on formularies determined at the state level, usually with a nominal co-payment of a few dollars per prescription.

The VA and IHS, unlike other public health insurers, are free to negotiate their own prices on pharmaceuticals. The VA by law gets at least a 24% discount from the manufacturer’s average retail price outside the federal government. Outpatient drugs are available with a copay of $5 for generics, and many vets are eligible for free prescription medications.

Dental and vision care

Medicare does not cover dental care, but some Medicare Advantage plans do.

Medicaid covers dental care for children. Coverage for adults varies by state.

Long-term care

Medicare covers part of 100 days per illness of long-term “skilled nursing care” as long as the care is triggered by a hospitalization of at least three days related to the illness needing long-term care. Coverage declines from 100% of the first 20 days down to $167/day for the remaining 80 days.

Medicaid is the primary payer for long-term care in the US, covering 62% of nursing home care and 50% of all long-term care nationally. In order for Medicaid to pay, patients must have no more than $2,000 in assets, excluding their car and a home valued up to $552,000; and require assistance with “personal care” like bathing and dressing. Medicaid requires a “look back” of five years to insure that assets have not simply been transferred to others.

What do we get from our health care spend?

Outcomes in Medicare tend to be slightly better than outcomes in private insurance. Outcomes in Medicaid tend to be slightly worse, probably owing to social determinants of health. For example, In commercial HMOs in 2018 the rate of hypertension control was 61.3% and in commercial PPOs 48.8%. Medicare rates of control were 58.9% in HMOs and 68.8% in PPOs. The Medicaid HMO rate of control was 58.9%.

After Thanksgiving we’ll talk about private insurance. Have a great holiday!

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.

What's a Year of Life Worth?

Determining the value of treatment

You’ve probably heard the term “cost-effectiveness” thrown around in regard to medical treatments. In this blog we’ve made the case that much of the testing in “executive physicals” isn’t cost-effective, for example; we argued that the weird little tests that some executives get simply aren’t worth the money because they haven’t been shown to improve quality of life nor quantity of life, a measure we bundle into “quality-adjusted life years” or QALYs (pronounced “quollys”). But we’re not just picking on C-suite folks. When any new treatment, like a new pacemaker, costs more per QALY gained than the theoretical care its high cost displaces, like routine blood pressure treatment lost due to the extra cost resulting in nurses being laid off, the health of the population suffers.

Historically, even though the Centers for Medicare and Medicaid Services (CMS) have explicitly avoided setting policy according to cost-effectiveness for fear of rationing care, we’ve used Medicare’s payment for dialysis as an “apocryphal” benchmark. A year of dialysis in the early 1990s cost about $50,000. And without dialysis a person with end-stage renal disease will quickly die. So, the argument went, a year of human life must be worth about $50,000 and any new drug, therapy, or surgical procedure should cost no more than $50,000 for every resulting additional QALY. By this argument, a chemotherapy drug that adds five years to your life should cost no more than ~$250,000.

Other ways to use this model

This model based on precedent is far from the only way people have tried to define cost-effectiveness. A 2019 mathematical model found that Americans with an income of $50,000 should be willing to pay $100,000 for one additional year of ideal health. An extrapolation of patients in the United Kingdom’s National Health Service–where cost-effectiveness is tracked extraordinarily tightly–estimated that Americans would be willing to pay between $24,823 and $40,112 per QALY gained. A somewhat similar analysis comparing US health expenditures to other countries estimated $60,475 to $97,851 per additional year of life.

In an attempt to define a more home-grown, objective, US-specific threshold for cost effectiveness, David Vanness, James Lomas, and Hanna Ahn recently published a simulation to determine the number of people in a model population of 100,000 individuals resembling the US population who would lose insurance because of a $100 premium increase (1.6%, or $10,000,000 total for the population). They used 2019 premiums from the ACA marketplace as their baseline, and they were able to estimate insurance loss from historical data on coverage losses from the ACA Marketplace.

Next, using a study of mortality reduction observed with ACA Medicaid expansion, they were able to deduce the number of deaths among the newly uninsured in a year. To account for loss of quality of life among the survivors (since QALYs account for both quantity and quality of life), they benchmarked to a study on health-related quality of life by year of age.

Then the investigators ran a simulation with these “givens” 50,000 times. Here’s what they found: for each additional $10,000,000 in health expenditures passed through to patients as premium increases (remember, the equivalent of $100 per person, or a 1.6% increase), roughly 1,860 of the 100,000 simulated patients became uninsured. This resulted in five additional deaths, 81 QALYs lost due to death, and 15 QALYs lost due to illness.

So a new treatment costing the theoretical American population of 100,000 people $10,000,000 would need to increase QALYs by 96 to avoid reducing the overall health of the population. $10,000,000 divided by 96 equals $104,000 per QALY, about double the apocryphal $50,000 per QALY estimated by Medicare’s dialysis coverage.

What do you think? This is a question far better suited to the Halloween season we just left than to the Thanksgiving season we’re entering, but it’s a question we all have to ask ourselves: Is $104,000 per year a reasonable threshold for insurance companies to use in deciding on coverage of new drugs, tests, or services? Are you an Ebenezer Scrooge, unwilling to pay even $50,000 per year of life? Or are you a spendthrift, willing to pay more?

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.

Are ICHRAs Trouble for Low-Income Workers?

Losing any part of your health coverage is bad news right now, when the United States has just recorded its highest-ever new caseload of COVID-19. So depending on how you’re covering the health care needs of your lower-income employees, news out of the United Hospital Fund last week, brought to our attention from Modern Healthcare (paywall), may be especially alarming.

The UHF reported Friday that low-income workers who buy their health insurance through “individual coverage health reimbursement arrangements,” or ICHRAs, could lose ACA premium subsidies or lose their eligibility for free or low-cost coverage.

How do ICHRAs work?

ICHRAs, which became available in January of 2020 (probably too late for your most recent open enrollment periods), were designed with the intention to allow employer groups to establish “monthly allowances” for individual employees who could then submit their medical expenses back to their employers for reimbursement on a tax-free basis. The intention was to encourage employees to seek care on the individual market, and then reimburse the employees for some or all of their expenses. Employers offering ICHRAs have broad discretion over what is reimbursed, and how much; employers can choose whether to provide allowances for individuals or individuals and their families. They can offer different allowances based on workers’ ages, they can decide exactly what expenses can be reimbursed (premiums, cost sharing, or both), and the employers can decide whether or not to roll over unspent amounts from one year to the next.

What this could mean

Unfortunately, the downstream effect of this could be that “… some workers could also forfeit premium subsidies through the ACA or lose eligibility for free or low-cost coverage…comprehensive group coverage [could be] replaced with an ICHRA, which could mean benefit reductions and narrower provider networks,” as Peter Newell, director of UHF’s Health Insurance Project and author of the report, said. The report offers a theoretical to illustrate this:

In lower-cost Erie County, New York (Buffalo), workers with incomes of $48,000 would pay more for coverage with a minimum affordable ICHRA and without ACA tax credits than they would under straightforward employer coverage. Workers making ~$24,000 would lose eligibility for the $20-per-month Essential Plan, and to obtain comparable coverage it would cost them more than $700 per month, a net loss of $680 per month. The only workers who would clearly benefit from an ICHRA in such an environment would be those making more than ~$50,000 annually, who would be ineligible for ACA premium subsidies.

Potential solutions

To correct this, the UHF recommended three changes at the Federal level (either congressional or regulatory): First, they recommend allowing low-income workers to opt out of ICHRAs without an affordability test. Second, the UHF recommends that individuals participating in ICHRAs be allowed to keep their ACA tax credit if they’re eligible for both, regardless of income. And third, the authors recommend the government discourage employers from replacing employer-sponsored plans with ICHRAs through new regulations. Given the enthusiasm of the current Presidential administration for ICHRAs (along with short-term limited duration insurance and association health plans), this third recommendation seems completely dependent on the results of the November 3 election. But your company’s decision on ICHRAs is not dependent on the election at all. If you have low-wage employees who have had success or problems with individual coverage health reimbursement arrangements, we’d love to hear your experience.

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH.

Is the Broker Model Broken?

If you ever squirm through the seeping underbelly of dastardly health insurance tactics like we do here at KBGH, you may have seen this report from The Hill last week outlining some alleged underhanded tactics being used by health insurance brokers.

The tl;dr (too long; didn’t read) version of the story is that the Government Accountability Office (GAO) performed an undercover audit of insurance brokers to determine if companies selling health plans exempt from the Affordable Care Act coverage requirements were being honest about the limitations of those plans. After all, ACA non-compliant plans tend to be cheaper, but they also tend not to cover preexisting conditions.

Out of 31 undercover phone calls to representatives in Alabama, Florida, Kansas, Pennsylvania, and Wyoming, during which GAO agents posed as customers looking for health insurance that covered their preexisting conditions like diabetes or cancer, about a quarter of the time (eight calls) sales representatives engaged in “potentially deceptive marketing practices.” Examples included:

1. Representatives telling the undercover agents that preexisting conditions would be covered, even when the agents claimed conditions that were explicitly excluded by the plan in question.

2. Representatives refusing to provide documentation of coverage prior to enrollment.

3. Representatives implying or asserting that the customer was being enrolled in a comprehensive insurance plan rather than, for example, a health care sharing ministry or membership in an association with a bundle of limited benefit plans.

4. Representatives suggesting that no other coverage was available.

5. Representatives intentionally falsifying the caller’s health status on the application.

 Examples of call recordings are available online.

In spite of its shades of its Dateline NBC-esque qualities, this doesn’t seem to have been a showy, “gotcha” operation. The investigation was requested by Democratic senators Robert P. Casey and Debbie Stabenow as a follow up on an investigative report on misleading online ads for non-ACA plans. But the GAO is a nonpartisan organization. The Hill, which reported the story, is well-known as a centrist or even center-right publication. And as Katie Kieth points out in Health Affairs, this isn’t even the first report of its kind. Many other instances of this kind of behavior have been documented.

What does this mean for you, the employer?

This news alone may not be very relevant to your company’s health coverage. After all, these agents were posing as individuals seeking a non-ACA compliant plan. If you’re in Human Resources this is very unlikely to represent your interactions with a brokerage or the greater health insurance industry. But this isn’t the first time the insurance brokerage industry has been stung recently. In early 2019 a Propublica piece showed that brokers working on commissions–usually three to six percent of the premium–routinely increased the cost of benefits to companies. This isn’t a personality flaw in the broker agents; it’s a feature of a flawed system.

To my knowledge no one has been able to mount a significant defense against these allegations. To the contrary: the 2019 Propublica piece led to senators calling for disclosure of perks and fees paid to brokers, a position enthusiastically supported by Michael Thompson, the president and CEO of the National Alliance of Healthcare Purchaser Coalitions, of which KBGH is a member.

What you can do to protect yourself

KBGH believes that brokers can be a vital part of the health insurance marketplace. Health coverage is confusing, and it is worth good money to make sure your company is getting the best value for its health care dollar. Ideally, we would like to see all brokerages work on a fee basis and take no commission off your premiums, since that commission perversely incentivizes the broker to increase your health coverage costs. To make this easy, Health Rosetta has created a “Benefits Advisor Compensation Disclosure Form” that you can download for free to use with your broker.

But at the very least, we believe in transparency. Your broker should be able to disclose all the ways it is making money off its work with you up front. If your broker refuses to do that, we recommend that you find a new broker.

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on topics that might affect employers or employees. This was a reprint of a blog post from KBGH.

Transparency is Trust

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on topics that might affect employers or employees. This is a reprint of a blog post from KBGH:

In 1963, Stanford economist Kenneth Arrow published the landmark paper “Uncertainty and the Welfare Economics of Medical Care.” He argued presciently that health care was an unfair system in which to bargain due to “asymmetric information.” The doctors, hospitals, and nurses simply know more than the patients, and this imbalance in information keeps the patient from being able to comparison shop or argue for fairer prices. If a doctor tells you you need a stent in your heart, after all, don’t you need it?

Equip patients with information and they usually make the right choice

There is data to suggest that patients, when given the right information to work with in a digestible way, make responsible decisions in health care purchasing. My favorite study on the topic looked at parents of children with appendicitis. Parents were randomized to see one of two videos: one group of parents saw a video that simply went over the difference between old-fashioned “open” surgery to remove the appendix and newer laparoscopic surgery that uses small “keyhole” incisions to put a camera and small instruments into the abdomen to remove the diseased organ. The video seen by the other half of parents explained the differences in the surgeries but also explained the price difference between the techniques (laparoscopic surgery is more expensive). Both videos stated that patient outcomes are similar with either procedure.

The parents who saw the video with the charge estimate were 1.8 times as likely to choose the open procedure. In fact, the effect of simply stating the charges in the video reduced the average price of the surgery from $10,477 to $9,949, a difference of $528, since more parents chose the open procedure when presented with good data. And more than a quarter of the parents choosing the open procedure said cost was the primary factor in their decision-making! This point is worth restating: parents, when confronted with a surgical choice in an emergency situation that, if handled incorrectly, could harm their own child, still took cost into account in their decision-making.

Things we’d hoped would work… but didn’t.

Many hoped the internet would solve the knowledge gap in medicine and empower patients. After all, in the business of buying and selling cars, some argue that information asymmetry is long-gone. If I were to buy a new Chevy Bolt today, I would simply choose my desired features on Edmunds.com, print the price sheet, and offer to pay my dealer a price in the ballpark of what Edmunds suggested was fair. But in spite of efforts from companies like Castlight, CashMD, and others, we haven’t seen a big dent in healthcare costs due to transparency alone. Some of this is due to the fact that doctors themselves–outside of the radical transparency of many Direct Primary Care physicians–aren’t always privy to the price of tests, drugs, or even their own services. And even those DPC doctors can’t necessarily share other outcomes we’re interested in, like rates of screening for cancer and metabolic diseases, mortality rates, and other quality indicators.

So the government has tried to step in. The Trump administration released an executive order in fall of 2019 requiring that by 2021 all hospitals must publish their “standard charges” online in a machine-readable format so that other software can begin to compare prices. This is a good start, but it is unlikely to work. Those “standard charges” are, in most cases, “chargemaster” prices that have little bearing on reality. Medicare, for example, pays about 31% of the chargemaster price. Second, patients mostly care about out-of-pocket payments, not insurance payments. To have an idea of their own liability, patients need the “bundled price” for the entire episode, which chargemaster prices do not provide. Instead, the chargemaster prices are for individual charges for materials and procedures

What CAN we do?

But we can’t just throw our hands up in frustration. As employers we should control what we can control. We can control state and federal policy as voters, but our power may be better wielded locally. We’ve pointed out previously in this blog that a lack of transparency was one of the big drivers of health care costs. That transparency extends beyond the operating room, exam room, or pharmacy. It reaches into the relationship between you and your partners, such as your broker, your PBM, and medical providers you may directly contract with. A good first step, if you weren’t able to attend our recent webinar with Dave Chase of Health Rosetta, is to ask for those partners to disclose all their revenue streams. Their undisclosed revenue streams may surprise you. Once everyone’s revenue is transparent, we believe that partners can work together in a more trusting relationship, to the benefit of both parties.

Note: KBGH works with Team IBX to introduce transparency in the insurance RFP process, but Team IBX was not involved in the writing and did not influence this post.

No one is padding numbers to increase COVID-19 case counts

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on topics that might affect employers or employees. This is a reprint of a blog post from KBGH:

I’ve heard a few times over the past couple weeks that hospitals are padding their case counts of COVID-19 patients in order to increase revenue. This is transparently, obviously false, as we’ll get into later. But before we wade into that, let’s take this chance for a quick review of how hospitals and doctors get paid for the care of patients.

The history and process for how physicians are paid

Once upon a time, billing for medical care was very informal. Hospitals and doctors largely set individual, almost artisanal, rates for each patient according to a “sliding scale” of what the patient was expected to be able to pay. Poor patients paid less, and wealthier patients paid more.

Once medical insurance became common, insurance companies, including Medicare, attempted to hold physicians and hospitals to the standard of  “customary, prevailing, and reasonable charges.” Unsurprisingly, this loose standard led to steadily inflated billing, so much so that the passage of Medicare is arguably what vaulted physicians from middle-class professionals into the upper reaches of national income. As early as 1970, congressional testimony referred to federal insurance as the “Goose that laid the golden egg” for physicians and hospitals.

Through a series of reforms in the 1970s, ‘80s, and ‘90s, billing for medical care became much more standardized (and in part led to the administrative bloat that is now the number one source of waste in American health care). Nearly every diagnostic or therapeutic procedure performed by a medical professional is now captured by a “Current Procedural Terminology” (CPT) code. For example, your dermatologist codes a “2029F” for a skin exam. A cardiothoracic surgeon codes a “33945” for a heart transplant. A routine, but fairly comprehensive new visit to a primary care doctor is coded a “99204.” All these codes are reimbursed according to the complexity of the task, taking into account the amount of time a procedure is expected to take, the amount of resources like syringes and protective equipment expected to be consumed, and the skill or level of training required to provide the service.

Hospitals themselves bill not according to CPT codes, but rather according to Diagnosis related groups (DRGs), which were introduced in the 1980s. DRGs are meant to make sure that reimbursement account for the severity and mix of the type of patients the hospital treats, and thus the resources that the hospital needs to treat those patients. For example, someone who presented with fever, cough, and a density on their chest x-ray, and who tested positive for COVID-19, would be coded a discharge diagnosis of “J12.81” for “pneumonia due to SARS-related coronavirus.” If that same patient needed ventilator support during her hospitalization, though, she would be coded “J96.01” for “Acute respiratory failure with hypoxia,” which pays in the ballpark of $54,000 (about three times as much as a COVID-related diagnosis). The additional payment is meant to pay for the increased duration of the visit and the increased intensity of treatment, since patients on ventilators are typically cared for by a single, specialized nurse, a respiratory therapist, a pulmonary physician, and others.

Our healthcare system has some inherent issues

The purpose of this post is not to defend current medical coding and billing. Our system is bizarre by almost any developed country’s standard. Take the way payment is determined for those CPT codes. The American Medical Association owns the Relative Value Scale Update Committee, or “RUC,” which is tasked with updating physician payment for those roughly 4,000 CPT codes. The RUC is powerful. It ultimately guides about 70% of all physician payment in the United States. Most of its 31 members are assigned by professional societies like the American College of Radiology and the American Society of Plastic Surgeons. Therefore, primary care doctors, the most cost-effective and crucial part of the health care workforce, make up only a tiny fraction of the committee. So the natural momentum of the committee is to steadily increase the payment for specialty care, while keeping reimbursement for routine care relatively flat. And the committee arguably works with faulty data. RUC recommendations are based on survey results of only about 2% of physicians, updated only every 5-20 years. Perhaps because of this, estimates of the time it takes to complete a given procedure—a vital component in calculating the complexity of care—are notoriously inaccurate.

In spite of these limitations, RUC recommendations are accepted without change by CMS more than 90% of the time, and commercial insurers largely base their payments on a multiple of the CMS charge as a baseline for negotiations with individual health systems.

Even though doctors can largely set their own rates without competition or pushback, they don’t get off scot-free. Because coding of routine visits is tied directly to the “complexity” of the patient, documentation requirements dictate that the average physician note in the U.S. is four times the length (paywall) of notes in peer countries. This is why you may have found notes from your doctor so long, repetitive, and bewildering. To make this worse, the advent of electronic health records has led to “chart bloat,” a phenomenon in which notes, thanks to cut-and-paste and other features, lead to an illusion of complexity and thus increased charges.

DRG rates, at least, are set by a slightly more predictable, scientific method. This isn’t to say that some gamesmanship doesn’t go into hospital billing; every physician in America has been coached on billing for the exact level of sickness of her patients at some point in her career.  The words, “Don’t bill a uroseptic patient for a simple UTI” still ring in my ears from residency.

So does this mean the number of COVID-19 cases are being inflated?

In spite of these faults, there is no evidence that we’re over-attributing illness to COVID-19. We are still under-testing compared to most of our peer countries, and this is reflected in the mortality data we’re seeing.  The “background” mortality rate in America is about 2.8 million deaths per year, with a little more than half of those deaths from cardiovascular disease and cancer. Deaths are seasonal and pretty steady year-over-year. But right now we’re seeing an excess mortality rate that is roughly double what COVID-19 accounts for. That is, only about half of observed excess premature deaths are in people diagnosed with COVID-19. So if anything, we are under-attributing deaths to COVID-19. After all, a patient who dies of a heart attack brought on by low oxygen levels and sticky blood due to an undiagnosed case of COVID-19 was still killed by COVID-19.

What about those increased payments for COVID-19 patients? It is true that hospitals make about 20% more for a patient infected with SARS-CoV-2. This is the result of the $100 billion slice of the federal stimulus passed in March that is allocated to hospitals. Why did hospitals get their own cut? Because volumes in hospitals are down by more than half as elective procedures like hip replacements and cardiac catheterizations—the lifeblood of hospital systems, for better or for worse—have been delayed or cancelled. Here is Harvard data on ambulatory visit volume through mid-April:

As a result, health care jobs—long considered “recession-proof,” are going away. Almost 43,000 health care jobs were lost in March alone. Health care is such a giant part of the American economy—a stunning $3.5 trillion per year, good for almost a fifth of gross domestic product, again, for better or for worse—that this reduction in health service delivery is thought to account for about half of our current loss of GDP. That’s why you hear our current financial predicament being referred to as a “health care-led recession.”

So if COVID-19 is a huge conspiracy to allow doctors, nurses, and hospitals to make extra money, it isn’t a very good one. 

Primary care is being crowded out

As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on topics that might affect employers or employees. This is a reprint of a blog post from KBGH:

The next time you have a minor injury or get sick, will you call your primary care doctor to get a same-day appointment, or will you go to the local urgent care? Now may seem like a strange time to even be asking the question, since many patients aren’t taking the chance on either one. Patient volumes in medicine are down 50% or more as people practice social distancing and hospitals and surgery centers cancel elective procedures. But eventually we all need care. And a recent study in the Annals of Internal Medicine (paywall) found that when we seek that care we’re increasingly likely to seek it from urgent care centers.

Multiple investigators from Harvard, Mount Sinai, and the University of Pittsburgh looked at deidentified claims data for adults aged 18-64 years from a single commercial insurer (they didn’t reveal which one) between January 1, 2008, and December 31, 2016 to determine the rate of primary care visits per 100 member-years. By cleverly using CMS place-of-service codes, National Provider IDs, tax identification numbers, and CPT codes, they were able to further categorize visits as having taken place in a purely outpatient office, the emergency department, an urgent care, a retail clinic, or a commercial telemedicine visit.

What they found was bad news for primary care doctors and, if you believe that primary care saves money and improves outcomes, as most policy makers do, bad news for the people paying for healthcare, like employers. Primary care visit rates declined 24.2% in the eight years of the study, from 169.5 visits per 100 member-years in 2008 to 134.3 in 2016. The proportion of insured patients with no medical visits at all in a given year went up, from 26.1% to 32.5%, as did the proportion with no visits to a PCP in a given year (from 38.1% to 46.4%). This trend held even when gynecologists were re-classified as PCPs, since some women get the bulk of their care from their gynecologist.

An optimist might venture that the population was just healthier in 2016 than it was in 2008. And in patients that had no chronic diagnoses the drop in PCP visits was higher. But overall the insured group did not get healthier or sicker over the time of the study.

So where did the care go? To “alternative settings.” Urgent care visit rates almost doubled, from 4.4 visits per 100 member-years in 2008 to 8.0 in 2016. Retail clinic visit rates more than tripled, from 0.83 visits per 100 member-years in 2008 to 3.0 in 2016. Commercial telemedicine visit rates rose a spectacular 500%, from 0.003 visits per 100 member-years in 2008 to 1.6 in 2016.

The authors posited three possible explanations for this: First, patients may be less likely to seek primary care if they are younger and healthier and comfortable with online self-care or a secure message with a nurse or other non-physician provider when a minor acute need, like conjunctivitis, arises.

Second, those increasing financial barriers such as increased deductibles and co-pays may influence care more than we have previously thought. The average out-of-pocket cost of a visit increased from $29.70 in 2008 to $39.10 per visit in 2016 for “problem-based” visits (that is, visits meant to address a specific complaint). And over the time of the study more PCP visits became subject to a deductible (from 9.2% of visits in 2008 to 25.2% of visits in 2016). The decline in PCP visits in this study was largest in low-income communities. Using some clever economic calculations the authors estimated that this may have explained about a quarter of the decline in PCP use.

But third, and most powerfully, patients appear to simply be replacing PCP visits with visits to specialists and alternative settings. Even though the proportion of patients visiting specialists did not change, many patients saw multiple specialists. And the increase of 9 visits per 100 member-years to alternative settings offset about a quarter of the PCP visit decline. This may well have been a matter of convenience. As we’ve discussed before in this blog, the average physician visit takes more than two hours. Traditional primary care settings are known for their inefficient or inflexible scheduling practices. One study found that patients are so frustrated by scheduling practices that they think nothing of blowing off visits, leading to high no-show rates in the clinic. Visits to alternative venues may simply be more convenient not only in getting a generic appointment, but in getting an appointment after-hours so that no work is missed.

If the convenience argument is correct, doctors may be able to get some of that patient population back by employing “open access” scheduling. In this system, same-day appointments are almost always available. The day’s schedule isn’t full of appointments made weeks or months ago. The doctors preferentially schedule follow-up appointments in the morning, but fill much of their afternoon schedule as the day goes on. Somewhat famously, this is how a Kaiser Permanente clinic in Sacramento reduced their wait for an appointment from 55 days to one day. But the system requires some sacrifice on the part of the doctor, which may be a tough sell in a system where PCPs are already losing market share. Open patient slots, after all, are potentially lost money. It also may require some sacrifice on the part of the system. Open-access scheduling is generally thought to require doctors to carry smaller “patient panels” than they traditionally do, which may in turn lead to a need to train more physicians.

For larger employers there may be other fixes, such as on-site clinics. And with the increased adoption of telemedicine into traditional practices, we may see more patients using that option instead of going to the ER or to urgent care.

If your business has found a way to incentivize increased use of primary care, rather than ever-expanding use of urgent cares and emergency rooms, let us know.

Links for Tuesday, November 21, 2017: more on the new HTN guideline, Gymnastics coaches throwing robot shade, the last iron lungs, Germany bans smartwatches, and Raymond Chandler hated US healthcare

Thoughtful post on the new HTN guideline by Dr. Allen Brett

Representative quote: "Consider, for example, a healthy white 65-year-old male nonsmoker with a BP of 130/80 mm Hg, total cholesterol level of 160 mg/dL, HDL cholesterol of 60 mg/dL, LDL cholesterol of 80 mg/dL, and fasting blood glucose of 80 mg/dL — all favorable numbers. The calculator estimates his 10-year CV risk to be 10.1%, making him eligible for BP-lowering medication under the new guideline. To my knowledge, no compelling evidence exists to support drug therapy for this person."

A gymnastics coach says the Boston Dynamics robot flip was a 3.5/5.0

'In a back salto, says Mazloum, “you want to be able to go as high as you can, and you want to be able to land as close to where you take off as possible.” To do that, the gymnast has to squat, throw her arms up by her ears so her body is a straight line (in gymnast-speak, opening the shoulder angle and the hip), then contract into a “closed” position again. By these standards, Atlas’ trick is “not the cleanest flip,” explains Mazloum.

Here’s Mazloum’s critique: Atlas didn’t quite get to that open position, “so it didn’t really get the full vertical that we look for. That’s why it went backwards a little bit.”'

The last of the iron lungs

Get your kids vaccinated for polio, folks.

Germany has banned smartwatches for kids

If I understand this correctly, it is not because smartwatches cause kids to be distracted monsters (although I don't doubt that that statement is at least a little bit true). The decision stems from the capability of bad guys to hack in and monitor the location of little Dick and Jane:

You have to wonder who thought attaching a low-cost, internet-enabled microphone and a GPS tracker to a kid would be a good idea in the first place. Almost none of the companies offering these “toys” implement reasonable security standards, nor do they typically promise that the data they collect—from your children—won’t be used be used for marketing purposes. If there ever was a time to actually sit down and read the terms and conditions, this was it.

Get your shit together, parents.

Asking parents to destroy them might be a bit of an overreaction, though.

Raymond Chandler paints a dark picture of American healthcare in a newly-discovered story

The title, "It’s All Right – He Only Died," sounds like the title of a video residencies would show interns to convince them that quality improvement and patient safety are part of their job.

The doctor who turned away the patient, Chandler writes, had “disgrace[d] himself as a person, as a healer, as a saviour of life, as a man required by his profession never to turn aside from anyone his long-acquired skill might help or save”.

Links for Wednesday, September 27, 2017: Pennywise as a McDonald's shill, healthcare as a right, vitamin D and falls

Unsatisfied with limiting itself to its whopperCoin cryptocurrency, Burger king Russia is complaining that Pennywise the dancing clown gives McDonald's an unfair advantage.

What? There's no way any kid ever has confused Pennywise with the modern-day Ronald McDonald. The Willard Scott version, maybe:

But Willard's been out of the burger bidness for a while now. 

See also: Whoppercoin

Healthcare isn't a right, but access to it is vital to a functioning democracy. 

That's my take. Atul Gawande (disclosure: I'm a big fan) takes his surgical mind to the problem and, as usual, illuminates the complexity of the issue. What if we had a system that allowed trash to back up into the streets if people didn't buy exorbitantly expensive "garbage insurance?" I suspect we'd move toward a system like what we have now: mostly affordable, in many cases government-subsidized trash collection. Healthcare could follow a similar model.

USPSTF is putting the kibosh on vitamin D for fall prevention.

When I was a resident in the early oughts, vitamin D was the hottest thing going. We thought we were going to fix or prevent sooooo many problems by optimizing people's levels. Unfortunately, almost no intervention with vitamin D has proven successful. Vitamin D levels instead serve as kind of a generic marker of unwellness. Repleting those levels does not in and of itself fix the unwellness, though.

Links for July 24, 2017: Athletes and their pee habits, mobile farmers' markets, and surgery as a placebo

Athletes are very resourceful at finding places to go when nature calls

Bill Walker at Kansas State (hail alma mater) was well-known for urinating into towels on the bench. He's not alone:

Mobile farmers' markets are hitting the road.

Food trucks are a surprisingly durable trend. So maybe it's no surprise. 

Surgery is one hell of a placebo.

You should still avoid it whenever possible. The average American has eight (8!) surgeries in his/her life. That's too many. 

This doesn't happen naturally.

Anabolic steroids are an integral part of the bodybuilding scene.

Why does this matter? Because they make people die young. An astonishing fraction of pro wrestlers, who also abuse performance-enhancing drugs in large numbers, die before age 60, and they die of things we associate with androgen abuse: liver cancer, suicide, risky behavior, and heart disease.

Michael Oher, subject of "The Blind Side," cannot pass a physical because of concussions.

I'm short on the long-term future of football in its current form.

Do Americans spend on health care just because we're a nation of consumers?

I'm skeptical. I hold out hope that Americans, if given the right version of price transparency, might spend less. But this series of graphs is pretty convincing to Tyler Cowen's argument:

ADDENDUM (7/24/17 11:28 AM): Is the President fit?

I suspect the headline is a double-entendre, but at least in terms of physical fitness, the answer is very clearly "no." But I'm not sure it matters that much, especially in the context of the swirl of controversy that surrounds the rest of the administration.