Healthcare News of Note through 10/19/2012
Healthcare News Week of 10/15/12
Keep them smiling? Under a pay for performance provision, hospitals risk a 1% medicare reimbursement reduction if they do not keep their patients.. happy?. This is now the case under HCAHPS, Hospital Consumer Assessment of Healthcare Providers and Systems. I think this is a laudable goal, as I believe happiness and health are indeed related, but still an odd measure and penalty. To anecdotally relate, my mother requires a good deal of care these days, but is a truly miserable person with a mental illness and who no health provider could ever ‘make happy’, regardless of how much they try. So as the article notes, this could punish the institutions dealing with the more difficult patients and have an adverse selection unintended consequence.
We have lost a champion of government support for basic research, such as through the NIH, with the passing of Senator Arlen Specter. NIH director Francis Collins opines on the passing of Sen. Specter.
Straight out of House (which I sadly don’t watch). “The Woman Who Needed to be Upside Down”.
Herbal and traditional medicines were at one time a fertile hunting ground for pharmaceutical development (digitoxin, taxol). The industry has certainly moved away from it, as target based drug screening and design has become the dominant (but not exclusive) paradigm. Is there room for more of this in the future? An article in The Scientist considers the difficulties and the utility of revisiting this one time common approach. I’d be hesitant to start a company with this model but think any big pharma operation should have research focused on understanding natural therapies.
Massachusetts has launched a ‘Health Information Exchange’ to facilitate information exchange and use between institutions. I don’t fully appreciate where this is going, but feel it will spread and be transformative.
Another signaling event is this story about a physician group making a treatment decision, specifically the use of a therapeutic, based on value. “Memorial Sloan-Kettering Cancer Center has decided not to use a newly approved treatment for metastatic colorectal cancer. Specifically, the cancer center will not give patients Zaltrap, which is marketed by Sanofi (SNY) and Regeneron Pharmaceuticals (REGN)).Why? The price tag. “The reasons are simple: The drug, Zaltrap, has proved to be no better than a similar medicine we already have for advanced colorectal cancer, while its price — at $11,063 on average for a month of treatment — is more than twice as high” So, while we are still in the midst of shifting from the FDA gatekeeping to reimbursers for the success of therapeutics, we have also begun the further shift to physician groups (and other ACOs) as arbitrators of value. I expect the next decades to be tough ones for big pharma.
Nutraceuticals World takes a look at the fight against ‘sugary’ beverages. With bans and taxes on the table as an effort to make consumers ‘be healthier’, or at least offset their unwillingness to be so. The beverage industry is not taking this threat with just a grain of salt (sorry, had to reach for that cliché). There is certainly a lot of money on the line here, as beverage makers try to walk the tightrope of both embracing healthier drinks and maintaining historic markets.
Pediatric testing of therapeutics can extend market lifetime, but also creates a lot of risk for the companies in terms of both public relations (should there be issues) and effective consent. Outsourcing Pharma takes a look at why companies may be shy of testing in children.
With a nod to the prior consideration of regulatiing sugary beverages, this Perspective (pdf) from the New England Journal of Medicine considers whether the Supreme Court decision to accept the health mandate in the affordable care act on the grounds of it being a tax, has opened the door for more use of the taxing authority of the government to influence health & behavior. Worth a read (I think it has indeed done so).
Biotech funding has struggled of late, particularly as the venture community has had difficulty exiting prior investestments. Luke Timmerman reports on some recent signs of encouragement from the biotech IPO market, and considers what it could mean to the industry overall.
For those keeping score on big pharma, the updated list of ‘largest financial settlements’ is out. It looks at those 74 settlements between Nov 2010 and July of this year, which total $10.2B dollars. Yikes. Johnson and Johnson has the illustrious infamy of making 3 of the top 10 payments.
Here is a story that sums up the problems in health care economics as well as any. Hospitals, it seems, are struggling in part because they have improved the care they provide. Specifically, the decrease in surgical complications following a procedure hurts revenues in a system that pays per procedure. “Researchers found that a hospital is reimbursed about $36,000 for a patient with surgical complications, compared with only $24,000 for a patient without complications. Moreover, the hospital loses about $1.2 million in annual reimbursement revenue for each 1 percent drop in the complication rate..” It is a catch-22 in the system to be sure, and one that pilot programs like accountable care organizations and gains sharing programs try to change. The issue can also be alleviated with rationing i.e. if there is a wait list, then reduced complications increases turnover and thus is a benefit – but that just introduces another catch-22. Not simple.
Here is something that might kill an hour for interested parties. I’m bolding for emphasis, because this is worth a look (as is everything, but prioritization is important). The New York Times has done a series on the digital revolution in healthcare, called ‘The Digital Doctor’. In a nice readable anecdotal style, the series captures the digital changes affecting care – from doctors with iPads, electronic health recors (pro and con), and smartphone health alerts (for you and care providers). There is a lot here, and it is well written.
And it time is more limited, the ‘Digitial Doctor’ series in the New York Times had a wonderful timeline of medical innovation termed “Milestones in Medical Technology”. It nicely shows the acceleration of innovation over the last couple of decades. What will be next?
The market for electronic medical records is expected to grow at 8% a year. My thinking is that there is and has been a nice investment opportunity here, but that perhaps we are in a lag period until the penalty phase of non-EHR adoption from the HITECH act kicks in.
Medica is launching a health insurance exchange that will focus on Accountable Care Organizations in Wisconsin. That is a bit new. Hmmm….bears watching.
Nature Reviews Drug Discovery provides a 2 page summary of the therapeutics in development to treat Autism Spectrum Disorders.