The Value of Biologics

American Health & Drug Benefits™ has reached out to a health and drug benefit decision maker to open a dialogue on the benefits coverage implications surrounding the high cost of biologic drugs. We asked Dr. Gary Owens to discuss with us how payors are turning data points, demographic trends, and pharmacologic discoveries into formularies and benefit designs that balance the demands of cost, quality, and access to care. With a decade of experience chairing the Pharmacy & Therapeutics Committee at Independence Blue Cross until 2006 to inform him, Dr. Owens described how benefit design structures are being redesigned to meet these interlocking needs.Robert Henry: By way of introduction, Gary, give us the basic direction that you would like to take on today''s subject—the high costs of biologics—whether your focus is on the benefit design structures that are going to be fashioned in response to the cost of biologics or elsewhere.Gary Owens: It is not uncommon for new and innovative technologies to be expensive compared with costs for an older technology. Keep in mind that technologies which were considered high in cost 15 years ago, are now considered either average or low cost. If the cost of a new surgical procedure 20 years ago was $10,000, it was considered astronomical. I can remember as a resident in the 1970s how we were admonished for using IV cephalosporin antibiotics, which then cost around $500 for 10 days per day of therapy.However, that was a different era. All things are relative. Now, we are in an ongoing healthcare cost crisis. In 1996, we saw healthcare spending exceed $1 trillion in the United States. By 2005, the $2-trillion spending level had been eclipsed and, slightly after the end of the decade, we will have exceeded $3 trillion in annual healthcare spending, representing more than 18% of the gross domestic output. At that level, healthcare spending certainly gets everyone''s attention for a number of reasons. For one thing, somebody must pay for it. There are only 2 major sources of payment for healthcare in this country—the federal government, including state and local involvement in Medicaid, and private employers. And it is clear that these payors of healthcare are concerned about costs. The federal government is trying to balance the budget, while private employers face having healthcare become a larger and larger portion of their cost of doing business, making it more difficult for them to compete. Consequently, they are pushing the people who administer their benefits—eg, health plans, PBMs—to find ways to control costs and keep premiums affordable. In some cases, this has meant changing benefits, implementing utilization controls on certain treatments, and identifying more efficient treatment patterns. We have brought many new ideas into the mix, including case management, disease management, patient education, and physician education. One of the areas that has come squarely into the spotlight is consumerism. The theory behind this is that if consumers have more of a stake in the issue, if consumers have to spend their own healthcare dollars on services, they will become wise purchasers.I am a bit of a skeptic, however. For the most part, consumers do not have the knowledge required to know how to spend their healthcare resources wisely. Even healthcare professionals, such as physicians and managed care executives, do not necessarily have sufficient knowledge to help direct them in how to spend their resources on the most effective treatments.Furthermore, you need to distinguish between 2 kinds of healthcare spending, those being discretionary healthcare spending and necessary healthcare spending. You as a consumer can readily decide when to take care of minor ailments, or when to have somebody look into a rash or check out a painful hip joint that you have been walking around on for the past 5 months, and when you need more aggressive attention than aspirin or another over-the-counter remedy.Then there are life-threatening or chronic conditions that absolutely require care. Sometimes, the treatments for these diseases are exotic and specialized, and therefore, very expensive. Keep in mind, that among patients in this category, 10% of the population will typically use 70% of the resources.Robert Henry: Has this statistic increased over the past decade?Gary Owens: When I first started in the business more than 25 years ago, there was the 80/20 rule, that is, 80% of the spending was done by 20% of the people. Today, half the population only spends about 3% of the healthcare dollar: the relatively young and healthy and also the ambulatory unwell who simply do not seek healthcare services for a variety of reasons. So we have 2 competing forces: on one side, half of the population spends almost nothing in healthcare resources, while the other spends a disproportionately large amount. About 10% of the population requires appropriate healthcare because their well-being and their quality of life depend on it. Unfortunately, the one-size-fits-all approach does not work when it comes to managing cost and creating consumer incentives for these very different populations. Each segment of the population has specific requirements because there are very different forces at work on these patients.Employers are looking for ways to control costs, and one of the ways has been to ask consumers to pay more out of pocket. In theory, this works well, but as I have noted, there are populations where this practice can be counterproductive. Many biologic therapies cost between $10,000 and $40,000, and some are as costly as $250,000 per year. If a consumer is asked to pay 20% of a therapy that costs $25,000, that would be $5,000 per year. This often results in having some consumers either forego the treatment altogether or take Draconian steps to afford it.Robert Henry: What disease states are driving this? Will patients with certain disease states receive healthcare benefits that cover the more expensive biologics because their employers have an incentive to get them well and return them to the productive workforce? Are there patterns emerging, or is this still all over the map?Gary Owens: Trends are gradually emerging. Fifteen years ago, there were only a handful of high-cost biologic therapies that were targeted at things such as anemia, growth hormone deficiency, and some of the inborn metabolic errors such as Gaucher''s disease. Since the mid-1990s, we have seen high-cost biologic therapies emerge for rheumatoid arthritis, cirrhosis, and hepatitis C. In these disease instances, patients are often symptomatic, but they are most likely in the workforce. Hence, the availability of these meds may keep them as productive individuals.Biologic therapy is now emerging for more common diseases such as asthma. Suddenly there is a shift. High-cost biologics are now targeted at a much larger segment of the population than they were 15 years ago. Furthermore, many of these patients are still perfectly capable of maintaining an active and productive lifestyle provided they are able to have access to these therapies. Again, some of the therapies range from $10,000 to $40,000 a year, and if patients do not have adequate coverage, they may find that access to them is limited.Robert Henry: It appears to come down to the single issue of access. It strikes me that the high cost of biologics supersedes the ability of the free market system to accommodate the population at large. Because if you are patient A and you have a disease that requires immediate treatment with a biologic that''s going to cost $50,000 to $100,000 a year, and cost sharing is going to be prohibitive, then you''re not going to want to wait around for 7 to 8 years for the market to stabilize, because you won''t be around by then.So, this is the kind of thing that tends to invite government involvement to remedy the situation. This can escalate to a point where the free market system fails and the government steps in to offer a remedy. Do you see this issue being resolved at the policy level?Gary Owens: I think it can be resolved at a number of levels, and you''re absolutely right, the cost of some of these therapies is such that if one doesn''t have third-party coverage for all or mostly all of the therapy, you''re just not going to get that therapy; it''s that simple. Or you''re going to mortgage your future in order to get it, and even that can only provide a limited amount of treatment in some instances.The temptation for legislative relief by way of mandates or other actions is always there; although I don''t know in what form that would come. One possibility is a form of price control on some of these therapies, which goes against the capitalistic, free market system. It could come in the form of the FDA requiring manufacturers of these new therapies to demonstrate the relative value of the treatments to the system. But one main opportunity exists outside of legislative or regulatory remedy, namely, in benefit design.Robert Henry: That is clearly the first place to start looking. The role of the payor in throwing a harness around this runaway stallion is still only partially utilized: so much power, so much potency for facilitating the treatment of diseases, so much life-saving potential.Gary Owens: Exactly.Robert Henry: All we have really done here is to run ahead of ourselves financially. The only vice is that science and the corporations funding the science have invented life-saving remedies that we have not yet figured a way to pay for. It is nothing more or less serious than that. Then front-and-center come the healthcare plan and the actuary models and the overall resource allocation models.Gary Owens: Yes, and up to now, we have figured out a way to pay for them in a straightforward manner: add the cost of the therapy into the benefit program and ultimately charge the consumer, the employer, or the federal government for the costs of these new therapies. Unfortunately, continuing to do that leads to problems. And as you pointed out, the day of reckoning will come, if it has not already.In most health plans, these biologic therapies were not really considered in their existing benefit designs. Benefit programs were often developed several years ago. There were relatively few injectable or infusible medicines, and most health plans offered a benefit that covered injections or infusions when prescribed by a physician in the health plan''s network.As these treatments began to grow, it was clear that not all health plans were equal, not all of them cost the same, not all of them offered the same benefits to the consumer. Management of these products consisted of selecting certain products that could be used for their approved indications, and in some cases, off-label. So traditional medical management programs were put in place. One example of the early management controls imposed involved growth hormones. Treating children with short stature owing to pituitary insufficiency or chronic renal disease was considered appropriate. But it was not necessarily appropriate for the system to pay for growth hormone for somebody who wants to be a bit taller or do body building.Thus, prior authorizations were put in place just to manage usage of these products. This obviously could not be done with every product. In 1990, there were only 20 biologics on the market. Now there are more than 300, and as many as 800 are expected by the end of the decade. So one quick temptation is to allow the problem to self-regulate: Create a unique group of products called the biologics, then create a new tier of benefits for them, allowing access to all the biologics a consumer needed plus a fixed dollar copayment or a percentage from coinsurance.The downside was that 10% of the population have life-threatening or serious chronic diseases. It is not unheard of for a rheumatoid arthritis patient to have 2 or 3 other chronic diseases and be faced with a 20% coinsurance on a disease-modifying agent. Consequently, they have to turn down the new drugs and opt for traditional therapy because of the out-of-pocket cost. The initial temptation to put biologics in a high-cost benefit bucket solved the problem only in the short term, and it may have created access barriers for patients with resultant decreased quality of life and possibly increased downstream medical costs.Robert Henry: How do healthcare plans avoid the kneejerk reaction to control costs at all costs, falling back on the tired model of cost-minimization when experience has shown that cost-effectiveness is essential to long-term success?Gary Owens: Health plans like to be able to apply cost-effectiveness and cost-utility models and comparative outcomes analyses in developing their coverage policies. That being said, these data are not currently available. In the absence of meaningful comparative outcome studies, health plans have been forced to take some cost-minimization strategies, because those are really the only things on which they have any hard data.It is a stop-gap measure, but it was born of necessity, because the other option is to continue to absorb those costs, which health plans can do; however, when health plans absorb the cost of new therapies, eventually premiums increase in the next underwriting cycle.Robert Henry: Yes, the cost point on the cost/quality/access triangle is out of kilter here. Seven years ago healthcare plan margins were perilously low, and over the past few years they have improved. Has this given plans a cushion to offset the new cost demands of biologics?Gary Owens: That cushion disappears very, very rapidly. In the health plan business, all things are relative. Somewhere between $0.80 and $0.85 of every premium dollar collected goes back out to cover healthcare costs. And $0.10 to $0.12 of every premium dollar goes toward the health plan''s administrative load. What remains is the margin, and, as you can see, that margin is quite small. A small margin on a large number of dollars can still represent some significant amounts of money that can go into a health plan reserve or become profit; but remember, as healthcare cost increases are covered, the amount of money that must be kept in reserve, either from a state regulatory standpoint or insurance department regulatory standpoint, must increase.So health plans must keep some reserve. If they do not, they become financially nonviable and incapable of dealing with downtimes or when their actuarial projections were incorrect. It doesn''t take very long to erode those reserves, and an ultimate outcome of increasing healthcare costs is to increase premiums. As premiums increase, fewer people are insured. Employers have second thoughts about providing healthcare coverage for their employees, especially small to mid-sized employers who may have to determine how to provide healthcare coverage for their employees and still have a sufficient margin to stay in business.Robert Henry: Earlier in our conversation, we discussed the natural course of events attending new technologies, which raises its head here in hopes of offering a natural, unlegislated solution. Over time, these new technologies will decrease in cost, and people have to be patient and allow the market to settle, and the cost of biologic agents to decrease on their own after we have gone through the hurtle of initial high cost associated with discovery and development. Is there a consensus on the part of chief financial officers at healthcare plans as to when such a settling out of costs might occur?Gary Owens: If it were most any other technology-driven business, I would agree that people are probably waiting for the proverbial light at the end of the tunnel. I recently purchased a laptop computer that is much more sophisticated and has more capacity than my previous laptop did 5 years ago. And it does it for less than half the cost. This is a perfect example of market forces and technology balancing new and improved technology with decreasing costs. Unfortunately, this paradigm does not fit medicine. New medical technology and medications continue to cost more, and as innovation builds upon innovation, the newer innovation tends to cost even more than the technology that is being replaced.Robert Henry: This brings me back to the core mission of American Health & Drug Benefits: the notion of collegiality, that the different stakeholders should combine forces to solve such problems rather than take adversarial, competitive stances toward one another. How can we—meaning we the stakeholders—make this system work to accommodate biologics?It seems to me that this is one of those examples where healthcare really stands to make progress and capitalize on the extraordinary innovations that biologics represent. Sometimes you have to ask for less initially to get more in the long term. Are there examples of the kind of cooperation that I am talking about, that is, enlightened self-interest? Which payors or leaders—either individuals or institutions or private companies—have been the most visionary in this regard?Gary Owens: Frankly, I think we are only on the edge of this ideal at best. All too often what occurs is exactly as you describe: Manufacturers get nervous about dwindling pipelines and having fewer products; payors react to increasing cost trends by deciding to put in management controls such as step therapy, or prior authorizations. Consumers and doctors often react negatively to increased controls, prior authorizations, and benefit designs that require high member out-of-pocket costs.I agree with you that at some point people need to step up and say, “We need to look for a different way of doing this.” Although I have not yet seen it, I would applaud the manufacturer that brings its product to market with outcomes studies and economic data that help place their product in the appropriate position in the value equation.Now this, of course, is a double-edged sword, because if you happen to bring a product to market and it does not bring high value according to your studies, then you''re going to have a hard time getting people to pay for it. On the other hand, if you can show significant cost offsets or that the cost of your product produces a value that is unparalleled by the competing products in the same space, you have the opportunity to hit a home run.I think the problem will be getting the parties to sit down and lay down their arms to solve this problem.Robert Henry: Yes. That is what American Health & Drug Benefits is attempting to do—increase dialogue between the sometimes warring factions.Gary Owens: Somebody must take the first step and take a chance that doing the right thing will ultimately be rewarding.Robert Henry: When I attended the Institute of Medicine roundtables on evidence-based medicine this year, there was that sense that people sat down at the table together. The venue had been designed that way so that there was a time for FDA regulatory people to step up and present their ideas for implementing evidence-based medicine standards. There was a chance for industry pharmaceuticals to step up and present their vision. There was a chance for patient advocacy groups or the healthcare plans for the purchasers. And I liked the feeling that was generated there. It seems to be another example of this kind of form building, this bridges-across-the-water process.Are the other examples of this conciliatory approach as opposed to having one sector dominate the healthcare debate and hope to solve the question all by themselves?Gary Owens: I am not sure you have anybody out there looking to solve it all by themselves. I think too many are still protecting their territory and solving their own problems without giving thought to the other stakeholders'' problems.The Institute of Medicine and a few places like that provide at least a starting point for problem solving—How can we continue to provide innovation in healthcare, yet provide basic healthcare for everyone? That is the dilemma. We need to get the stakeholders around the table. Who will lead this? I think you might know more about this after the next election.Robert Henry: There has been a lot of movement in the past few years toward empowering the Agency for Healthcare Research and Quality (AHRQ) to become a center for comparative effectiveness, that is, making it the definitive center for evidence-based medicine standards. Do you consider this an example of healthy data clarification, or an attempt by one healthcare stakeholder group to solve the problem once and for all, as opposed to a collegial way of sitting down and sharing information?Do you think this movement by the government to establish an evidence-based center is fraught with peril, as some fear, or can it help contribute to the dialogue that you hope to promote?Gary Owens: If properly done, taking into account the viewpoints of all the stakeholders, including physicians, patients, health plans, employer groups, manufacturers of innovative products, to name only a few, with balanced, scientifically driven opinions, I think you could create a highly effective body. The challenge is to create a body that can simultaneously balance the needs of all those stakeholders.Robert Henry: Yes. This would require approaching it as an art and not solely a science.Gary Owens: True, not all of medicine is scientifically driven. A good physician must balance the scientific, personal, and artistic aspects of medicine to achieve the best outcomes.Robert Henry: Well, this requires a certain amount of lobbying—for want of a better term—by each of the stakeholder groups to make sure that their point of view is heard. That would mean that each of the stakeholder groups would have to have access to a leadership community within AHRQ to make this work. And there remains another aspect to their effectiveness. Will AHRQ have sufficient funds to do this?Gary Owens: Funds for AHRQ might double from 2007 to 2008, which is a good start, but probably only 5% of what is really needed to get real answers on evidence-based medicine. That of course brings up another related issue: the high cost of biologics. It becomes a lot easier to pay that bill if there is clear and indisputable evidence that biologics produce high-value outcomes.Robert Henry: With so many of these disease states occurring in small populations, you cannot get sufficient numbers of patients to complete a randomized controlled trial to determine the effectiveness, safety, health-related quality of life, and performance perimeters. What trial designs do you look for when you are evaluating biologics to determine if you are getting a sufficient clinical return on investment? And to what extent do medical and pharmacy directors participate in this process?Gary Owens: Medical and pharmacy directors must collaborate in the process of evaluating biologics, because some of these products are covered under the medical benefits and some by the pharmacy benefit. Some plans have crossover coverage. As you pointed out, we need large, longitudinal trials and trials in naturalistic settings to properly determine value. As soon as you introduce patients into a clinical trial, you have already created an artificial setting that does not always resemble the real world and does not always produce outcomes that can be duplicated in the population at-large. Studying large populations in naturalistic settings is probably the best way to evaluate the economics of these issues. We generally only have the FDA-required studies, which amounts to examining safety and efficacy. Cost-effectiveness is not evaluated; therefore, acquisition cost is all we have to work with. In other words, if the cost is too high, then utilization may need to be managed.We do not have all of the pieces of this puzzle necessary to assign value to biologics. All we have is cost. And if the cost is high, drug utilization management often becomes restrictive.Robert Henry: Permit me to offer an historical analogy. In the New World, pioneers such as Lewis and Clark sought new methods for understanding, exploring, and developing a new country. The same principle should be in place here. We have a new medical world before us in the form of biologics. It stands to reason that some innovators, both individuals and organizations such as healthcare plans, are going to boldly apply different approaches to a new entity, but this time in the form of benefit design methods, which brings me back to an old axiom: when you''ve seen one managed care organization, you''ve seen one managed care organization.Gary Owens: Which still holds true, by the way.Robert Henry: What then has been your observation industry-wise with regard to payor innovation in this brave new world of biologics? And can innovation occur, given the clamor for conformity to guidelines, especially where the technology is too new to allow for meaningful guidelines?Gary Owens: I think we are still waiting for the leaders to emerge. For the most part, however, most plans are exploring in their own unique ways. This is still a new enough problem that the solution has not yet manifested in an obvious fashion. Because this is a highly competitive business, it is difficult to be an early innovator and risk failure. Look at the incentive of the payor: If a health plan tries something radical and extremely pioneering and falls flat, it may have given away its competitive advantage for a significant period of time. It takes a health plan a long time to recover if it loses significant market share.Robert Henry: Also true if a healthcare plan takes in all the sick patients who show up at their doorstep to get the liberal coverage benefits provided.Gary Owens: However, if they truly come upon something innovative and can actually take care of these people and make a name for themselves, they win big. But it''s a big risk to take.Robert Henry: It certainly is. I wonder if plans can try something on a small scale, so they don''t risk their entire portfolio.Gary Owens: Yes. I think pilot programs are often the way. I think it behooves all of us who are in this business to keep our ears to the ground and continue to follow new trends and emerging ideas. Whenever somebody truly finds a solution in this business, it is quickly emulated.Robert Henry: One of the other considerations is to look at how each medical group expresses its interest in the utilization of these products. I think it''s safe to say that cancer and rheumatoid arthritis are the principal disease states affected by expenditures with biologics.Gary Owens: Yes, the biggest growth area is oncology. Nearly half of all the new biologic therapies are targeted at cancer. Another big area is for diseases mediated through the immune system, such as rheumatoid arthritis, lupus, and Crohn''s disease. A host of other illnesses are also targets for biologic development, simply because the underlying disease mechanisms or the pathology is already understood.Robert Henry: How are medical groups such as the American Society of Clinical Oncology and the American Society of Hematology expressing their desire to utilize the biologics? I ask this because we know that each stakeholder group exerts official pressure to increase access to drugs they find advantageous. Both of these societies came out strongly in favor of more liberal coverage than that determined by the Centers for Medicare & Medicaid Services.Gary Owens: Yes. They have certainly made their position statement quite well known. They usually begin with position statements for their membership that outline how they believe the product should be used, followed by guidelines for the specific use of a product.Robert Henry: So it begins with a dynamic tension between the stakeholder groups that tends to result in a given level of coverage.Gary Owens: That is correct.Robert Henry: In all of this, where is the value of patient knowledge in participating in the cost management aspects of this? I ask because we saw what happened in the wake of the article about rosiglitazone in the New England Journal of Medicine and the national furor that ensued from a meta-analysis that many regarded as being of less than conclusive worth. It is likely that the principal result was that patients refused to take their drug anymore. If patients are going to participate in the decision-making process, they have to know enough to be able to say this is what I want and this is what I do not want. What are the implications for biologics, which are far more complicated and probably less within the grasp of the lay public?Gary Owens: Well, I think the lay public is very capable of commenting appropriately and intelligently. The problem is that the issues often hit the press so quickly that the public is provided with incomplete information. The public often will act on incomplete data when they appear to be positive for controlling a disease. It strikes me that many clinicians may also fall prey to oversimplification of the results of one study.Robert Henry: Do you see opportunities or incentives for healthcare plans to institute more aggressive patient education programs? Is it worth their while professionally to try to educate the public sufficiently to engage in a dialogue with their payors and doctors about biologics?Gary Owens: Yes, but we do not know who should be responsible for informing the public. Although it''s tempting to put the onus on health plans, they have limited resources and limited ability for outreach. And sometimes communications from the health plan are viewed by the public as self-serving. So they may be viewed with skepticism.Robert Henry: This strikes me as an opportunity for a larger organization such as PhRMA to be a participant in patient education programs with the medical associations. I could see something at the higher levels of each of the stakeholder groups where the dialogue is further extended, for example, to patient advocacy groups and so on. Does that seem to be part of a reasonable patient education process?Gary Owens: If you can create a patient education process that would be viewed as free of inherent bias and one that represents the viewpoint of multiple stakeholders in the process, then it will be thought of as a credible source of information to the public. The key there is that I think we still have to invent it.Robert Henry: We have seen efforts from American Health Insurance Plans (AHIP) with regard to improving quality of care. So there is a desire and a willingness to become proactive on healthcare measures. The climate appears to becoming conducive to such a collaborative measure. It just strikes me as one of the possibilities for progress.On another front, AHIP has been lobbying for generic biologics, and it seems to me that this might be one of the answers to the high cost of biologics. What are your thoughts on this?Gary Owens: Well, this is a possibility; however, the cost of new pharmaceuticals continues to be high, so I am not sure I would expect the use of generics to bring down the cost of new biologics. This is only one piece of the equation. This does not answer the question about how to manage costs with emerging technology.Robert Henry: You bring up an important point: Emerging technology needs a lot of upfront funding for 5 to 10 years before a drug is brought to market. And that requires a strong empowered pharma in the stakeholder sector. In fact, no stakeholder group can afford to be weakened as we continue the process of discovering and bringing new biologics to market. Would you say that it is worth the effort to bring these biologics to market?Gary Owens: I think you hit one of the major issues of the dilemma. In our highly competitive business environment, we need to reward those—whether it''s pharma, a health plan, or a hospital—who are willing to take a bold step for innovation. There are many individuals who seek innovation, who want to step out, but who are bound by the constraints of our highly competitive business environment. You know, I don''t have the answer of how you get around that, because this is a highly competitive environment. And it is precisely this type of environment that has made us as successful as we are with breakthrough technologies and innovation.We need to balance rewarding innovation and technology and taking risks with providing a product that the public can afford. And so I think it is going to take some radical change, some radical reform, exactly those things that your journal, American Health & Drug Benefits, is helping to promote, namely, bringing multiple stakeholders to the table and beginning to introduce and promote collaboration.Robert Henry: Many are too often ready to vilify big pharma, despite their having been the source of life-giving medications and therapies and devices for many years.Gary Owens: As well as the source of incredible innovation. We are often too willing to vilify an organization that is successful, concluding that it must be doing something wrong to achieve success.Robert Henry: And it''s the same with government. The FDA can be looked on as oppressively restrictive. Payors can be oppressively restrictive, instead of managers of resources. The purchasers can be looked upon as totally self-interested. The patients can be looked on as naïve and greedy for all the benefits of modern research, but not willing to pay for any of them. All the negative stereotypes could go on.Gary Owens: So, we have to be careful not to vilify any sector. Every sector has valid reasons for doing the things they do. Depersonalizing the dynamic, it becomes a matter of addressing, aligning, and correcting, where necessary, the incentives driving each stakeholder group. These are not good or bad parties, just different participants to the process of care.Robert Henry: I am interested in seeing if an appreciation for the right kind of financial strength of pharma and biotech of the manufacturing sector can emerge, because pharma is a resource that has grown out of a period of economic prosperity in the West over the past few decades to the point where we are able to produce the biologics that we have been covering in today''s conversation. And that resource is finite. If it is hit too hard and treated in a totally adversarial way, it can disappear. And I don''t mean to single out pharma as the sole sector requiring protection. Pharma has to be equitable and balanced and reasonable in its desires for profitability. And it has to be ultimately on fire with a desire to improve patients'' care. And if everybody keeps their eye on that prize—the regulators in government, the payors, the purchasers, the patient advocacy groups—if everyone treats this as Operation Fair Share, then I think we can pursue this new world of biologics with a certain degree of patience, which is really hard to do when there is an immediacy toward patients wanting to get the best care to reverse the progression of their disease. Do you have any final thoughts for payors regarding how they should conduct their affairs strategically in benefit designs for biologics?Gary Owens: Well, I think that has been the essence of this conversation. Ultimately payors will need to examine their benefit designs, how they are paying for value, or how they are assessing value. They are going to have to be willing to reassess their benefits, reassess how those benefits affect certain vulnerable populations and be willing to adjust those benefits as new information emerges.This would help them direct the benefit design in such a way that we are neither wasting healthcare resources on inappropriate spending, and at the same time, that we are not depriving patients of vital care. I think such changes will occur as a gradual process.Robert Henry: There is one final question to that, Gary. Do you see an increase of communication within the corporate infrastructure of the average healthcare plan, that is, an increase of communication between the CEO, the medical director, the pharmacy director, and the CFO? Have you seen evidence of an increase in dialogue between these groups to arrive at a corporate consensus that will help them devise benefit designs?Gary Owens: To a great extent, this dialogue has always been there, and we are seeing a continued process, where, in a successful managed care plan, all of the stakeholders in the plan are at the table. This is what makes a health plan successful—having open internal dialogue that flows across various stakeholders in the plan and breaks down the barriers of communication within the plan.Robert Henry: Won''t it be nice when this harmony characterizes the entire stakeholder spectrum.Gary Owens: We''re going to need it if patients are going to receive the awesome potential that biologics offer. This is a case of potentiality versus reality, and we are only just beginning to realize how to reap the harvest made possible through biologics.?

AHDB Stakeholder Perspective

Value-Based Benefit—A Joint Effort

In the era of rising healthcare cost, it is easy for all stakeholders to point fingers at others and assign the “blame” for the high cost of care to any of the other stakeholders. For the system to advance, it will be important for all stakeholders to begin to grasp the complexity of providing healthcare to a growing population, a population that is rapidly aging and to a population that desires the latest and best that medicine has to offer. Simply put, we cannot afford to spend precious healthcare resources unwisely. We must design a system that neither wastes resources on new technology that is unproven, nor deprives patients of access to valuable new technology that has the potential to improve their clinical outcomes or their quality of life.To do this, each of the stakeholders must be prepared to work collaboratively. Patients and providers will need to understand that without proper evidence of effectiveness—and in the future cost-effectiveness—access to some therapies may need to be limited, or simply not available, under insurance benefits. The concept of mandated benefits may need to be reconsidered at the legislative level as in states where there are significant mandates; the cost of health insurance typically exceeds those states where no mandates are available. Insurers will need to be willing to provide new benefit structures that allow relatively open access to treatments—no matter how costly—that are proven to be effective and cost-effective for the treatment of chronic illnesses.Manufacturers of these treatments will need to show, by well-designed studies, the comparative efficacy of their newly created therapies relative to existing treatments. They will also need to show cost-effectiveness of their treatments in this new environment.Finally, the purchasers of healthcare, the government, and private employers will need to understand how these new benefit packages are evidence-based, and how the covered therapies are providing value to justify future cost increases.In short, it will be necessary for all involved stakeholders to stop looking to the others to solve the problem and work cooperatively to develop new benefits and products that meet the goal of providing access to timely and effective care, without wasting resources. This is a challenge that readers of American Health & Drug Benefits™ should be willing to embrace, as well as provide the leadership to accomplish it.     

Who knows best: the patient or the provider? A nursing perspective

Who knows best: the patient or the provider? My opinion, based on a review of the literature and practical experience, is that the patient, the provider and the system each offer a unique perspective that we can draw upon in ensuring quality care across the continuum. Nurses have a unique body of knowledge and skill that they bring to each interaction with the patient. They must have an awareness of the patient's and the system's expectations and interact and negotiate realistic expectations for each. The maintenance of balanced expectations and the measurement of effectiveness will continue to be a challenge. However, patients should be involved in and direct aspects of their care and feel satisfied with the process. Ultimately, nurses and the hospitals in which they work are responsible for providing effective and satisfying care. I would like to end by reinforcing the importance of the patient's voice in the provision of compassionate care. It is disheartening to read about patients' experiences of "discompassionate healthcare" (Holloway 1999). Yet I am reassured when I read or experience examples of compassionate and effective care such as that outlined by Valerie McDonald. (Hospital Quarterly Winter 1999/2000) Ms. McDonald, a former social worker and adult educator, is the mother of three daughters, one who had Burkitt's lymphoma diagnosed in 1994 and a second who had acute lymphostatic leukemia diagnosed in 1997 and who died recently in 1999. McDonald provided a wonderful perspective about her hospital experiences--the good and the bad. There would be no denying from this report that patients know the key qualities necessary for effective and compassionate care and that this mother recognized the energy and time it took to provide this care. "I hope," she states, "as the dust settles from restructuring and cutbacks that hospital staff will still have the time, energy and flexibility to practice the art of healing as they did with my children" (p. 24). I too reinforce that we must ensure nurses (and others) have the resources, the flexibility within their roles and the knowledge and skill to practise both the art and science of nursing.     

Autonomy-Centered Healthcare

In this paper, I aim to demonstrate that the consequences of the current United States health insurance scheme on both physician and patient autonomy is dire. So dire, in fact, that the only moral solution is something other than what we have now. The United States healthcare system faces much criticism at present. But my focus is particular: I am interested in the ways in which insurance interferes with physician and patient autonomy. (I do not consider The Affordable Care Act much of a change in this aspect of the system, for it still relies heavily on private insurance, albeit often subsidized.) I will argue in favor of an expansion of the traditional conception of what I call “medical autonomy” or “healthcare autonomy” and the usual role it plays in bioethical discussions. More generally, I show that in morally designing or evaluating any healthcare system, serious attention should be paid to how this system helps foster what I call active autonomy.     

Forty-Third ASPEN Presidential Address: “Our Time Is Now—Challenges and Strategies for the Field of Nutrition”

I am grateful for this opportunity to address the ASPEN community and the international colleagues gathered at the ASPEN 2019 Nutrition Science and Practice Meeting. I have used this platform to revisit some of the historical beginnings of our field and our organization, and illustrate some of the lessons learned. I have outlined 5 challenges facing the field of nutrition during our times and discussed strategies that might help navigate them. These challenges are, healthcare finance, biotechnology disruption, safety, research, and knowledge transfer. These challenges will require nutrition providers to adapt to changing times. We must be prepared to show the “value” of the care provided. The impact of nutrition therapies must be unequivocally demonstrated on meaningful patient outcomes, thereby emphasizing the relevance and value of the services we provide. As clinical nutrition professionals, we must embrace the rapid pace of biotechnology advance and harness its power to assist us and our patients. The provision of safe nutrition care to our patients is the fundamental aspect of the ASPEN vision. I remain confident in our collective strengths, our sense of purpose, and our ability to rise above the challenges we face. Together with our global partners we will deliver on the promise of safe, efficacious, low-cost, and high-quality nutrition that will improve patient outcomes and population health.     

AAHE scholar presentation. Boston, April 22, 1989. Reflections on directions in health education: implications for policy and practice

In summary, this paper has attempted to share some reflections on directions in health education. I have called attention to the issue of "micro myopia," which narrows our perspective, turns us inward, and predisposes us to be less supportive of societal responses. The need for a broader perspective was presented and directions in which we should be going were identified. Attention was directed at the disproportionate and inappropriate emphasis on risk factors. Our limited knowledge base is evident, as are the limitations of an individual behavior approach. Concern was also expressed about the increased phenomenon of the educationalization of health problems and the gradual emergence of a mortality in health education. Finally, the relationship of risk factors to health was challenged. It seems that reduced mortality and increased longevity are driving forces, but are these synonymous with health? Few would argue that they are. Overall, concerns have been raised and suggestions forwarded for consideration, analysis, and debate. Where will we be in the year 2000? I don't know. Hopefully this presentation will provide insight into our current positions and help us reflect on our future directions.     

Medicare Coverage Policies for Biologics: The Broad Gray Line

In October 2007, American Health & Drug Benefits asked Dr Joseph Antos to discuss the forces that have shaped Medicare''s policies and their impact on the various stakeholders in US healthcare. The first part of the interview appeared in AHDB in February 2008. This second part focuses on the impact of the Centers for Medicare & Medicaid Services drug coverage on the future of biologic products. This discussion does not reflect any new developments occurring after October, such as the recent recommendation of the US Food and Drug Administration advisory committee to narrow the indication for erythropoiesis-stimulating agents to patients with cancer.Robert Henry: How are decisions being made for conventional pharmaceutical products on the one hand and biologic products on the other? Biologics have a comparative carte blanche—for now. Attempts at cost-containment in biologic treatment have been shown to be counterproductive, punitive, and not cost-effective. How adept are payors in utilizing conventional pharmaceutical products compared with the biotech products?Joseph Antos: Clearly, proliferation of unique products that promise benefits not available from conventional pharmaceuticals, and for which there are no substitutes, will be a challenge for insurers, including Medicare. Although some biologics—such as insulin, human growth factor, erythropoiesis-stimulating agents (ESAs)—have been around for a long time, we are already seeing exotic new molecules coming on the market to help narrowly defined patient populations with specific cancers and other serious diseases. These are not the mass-market blockbusters of old; these are products that will hit the market with laserlike precision. Past experience will provide little guidance to insurers facing a more fragmented, but more intense, market demand from highly motivated groups of patients and their physicians.Virtually every decision an insurer makes will be more complex. Coverage, which was never an easy decision, will be complicated by the need to also pay for specialized patient testing to determine suitability and dosage strength. Will insurers be willing to pay for expensive tests for all patients presenting with a specific disease, possibly spending substantial sums to screen out patients who would not benefit from the drug? Patient management will take on a new look if there are no close substitutes for an expensive biologic. Moreover, patient monitoring will become even more important for tracking effectiveness of the treatment and possible side effects—both issues of interest to the payor as well as to the patient and the doctor.Price negotiations will also be perplexing. How does the insurer gauge value and potential demand from its customers, and what is the basis for price negotiations with the manufacturer? Where is the balance between cost and patient value?Insurers are not alone in this complicated new world. The innovator drug companies themselves must consider the same issues. The ultimate question they must answer at a very early stage of drug development is: What is the market potential for a product that has great scientific potential but that is not fully proved, a product that will require the investment of time and a very large amount of money before it gets to market?Henry: It is a problem of alignment of stakeholders, and I am sure it fascinates the formulary and drug benefit design decision makers.Antos: “Fascinates” is probably too benign a term. “Terrifies” may be closer to the truth. There is big money at stake, and greater uncertainties than in the conventional pharmaceutical market concerning the drug efficacy, the size of the market, willingness to pay, and possible adverse consequences that can only be detected once a drug has gone into general use for the relevant group of patients. The drug may be very effective for most patients with a particular disease, or it may be valuable only to a small subset of patients. There may be hidden factors that cannot be determined through relatively small clinical trials that would dictate which subset of patients should receive the drug. Genetic or other types of patient testing could clarify this issue, but such tests may be difficult to develop and could be expensive.Henry: Can we conclude that the conventional pharmaceutical products have been overregulated with benefit design hurdles? Might this tend to induce pharmaceutical companies to abandon research and development of conventional products and focus on the higher payback areas in biotech?Antos: One could argue that there has been overregulation of conventional pharmaceuticals, but I don''t think that''s the main problem. The US Food and Drug Administration (FDA) vacillates between protecting patients from possible health problems that result from approving a drug too quickly and protecting patients from the potential loss of therapeutic value by not approving a drug quickly enough. The pendulum seems to be swinging toward greater caution in drug approvals. However, I think the real problem is scientific; the search for breakthrough conventional pharmaceuticals has become increasingly difficult. Consequently, we see mainline pharmaceutical companies spending large sums on mergers and acquisitions of other drug companies—in many cases, to acquire the intellectual property of the smaller company. Clearly, the big companies recognize that the next frontier is the biologics area.Furthermore, while small innovator companies may have an edge on the science, they have a real disadvantage coping with the regulatory process and marketing. Big pharma has the size and experience to overcome those hurdles to market success. I think we will continue to see a strong synergy between the biologics innovators and big pharma.Henry: The utilization of drugs, biotech or otherwise, is supposed to be following evidence-based guidelines. However, recent events show that that evidence-based medicine is a thin veneer easily peeled off in the face of agenda-driven initiatives. When the robust biotech pipeline floods the market with costly drugs, we better have a grasp on evaluating their value. A riveting example of the problem was the events that followed the publication of the rosiglitazone meta-analysis, conducted by Dr Steve Nissen, in the New England Journal of Medicine last year. The publication of the study hot-wired into the professional, public, and government mainframe. Whatever you think of the study itself, it seems hard to justify the degree to which one questionably done meta-analysis affected the entire healthcare landscape. The question is, was the study critical of rosiglitazone in general or only on the branded-name product known as Avandia? For if it was the latter—I think Dr Nissen said something to the effect that he isn''t afraid to take on any of the big pharma companies—then we have some hard reckoning to do here.Antos: In politics and in healthcare, the boldly stated accusation trumps careful analysis every time. People remember the simple negatives, and hold on to them even when the more complicated truth finally comes out. That''s human nature, but it is no way to run the health system.As you indicated, the Avandia meta-analysis was done in by partial analysis. Dr Nissen had access to the preliminary results of several clinical trials and used those results to rush to judgment about the increased risk of heart attacks to patients. His conclusions were dramatic—the odds of having a heart attack increase by 43% for patients who take Avandia compared with those who take other drugs, or a placebo. No need to ask whether the FDA confirmed the clinical significance of these preliminary findings. The FDA had not made that determination in May 2007, when Dr Nissen''s story hit the media, and the FDA maintains that the studies remain inconclusive. No need to ask what may be the absolute risk of adverse consequences for patients taking the drug. Typically in drug studies, a large-percentage increase in the risk of serious side effects is based on a very small absolute risk of incurring the negative health outcome.Certainly, the industry could have been more forthcoming about potential problems with the drug. And one can legitimately criticize the regulatory process for lapses that could harm some patients. But there has to be a balance. I do not think the industry can get ahead of the Steve Nissens of the world, because there will always be a critic who can claim the company did not reveal information quickly enough or completely enough. There will always be a lawyer ready to take a product-liability case to court, and ultimately money changes hands and scalps are taken. That is part of life today for pharmaceutical companies.As a society, we should focus on the net impact of this on patients. Once a drug gets a bad reputation (regardless of its usefulness in treating disease), doctors won''t prescribe it, and patients won''t take it. Vioxx is the best-known example. This drug was vastly superior to other painkillers for patients with severe arthritis who also suffered abdominal pain and complications from other treatments. This drug obviously had risks, like all pharmaceuticals, and it was overprescribed to patients who could safely use less-powerful drugs, but it was clearly the painkiller of choice for some patients. A good outcome would have been to tighten the prescribing standards, limiting the drug to the appropriate class of patients. Nonetheless, the drug was withdrawn from the market under a barrage of negative publicity.As I said, there has to be a balance, and public scrutiny of the actions of the FDA and the pharmaceutical industry is certainly in order. There is always the need for countervailing pressure to ensure that those who stand to make money from the sale of health services and products do not overstep science or their responsibilities to patients and the broader society. Independent researchers should be able to analyze the data and draw their own conclusions about the safety and efficacy of a treatment. That is positive. The question is, do we have reasonable research standards? Are the data up to speed? Do we have a sensible process of getting that information into the system in a way that doesn''t cause panic and precipitous action that does more harm than good? We don''t now.Henry: The interesting takeaway of the rosiglitazone study is the gaping system-flaw it reveals.Antos: And nobody seems to be working on it, either. Clearly, individuals have the right to analyze evidence, draw conclusions, and publicize them. What we cannot seem to find is the line between providing information and hollering “fire!” in the theater. In the case of pharmaceuticals, I think that line is very broad and very gray. Different individuals and organizations will have differing views about when a result is solid enough to call for action on the part of the FDA or the manufacturers. Good judgment is hard to come by, and there will be disagreements about what constitutes good scientific evidence.This raises the issue of comparative effectiveness analysis—the latest “silver bullet” that promises to simultaneously improve the quality of care and reduce unnecessary health spending. An oversimplified, but increasingly popular view, is that better data collection on treatments and outcomes can lead to unbiased analysis that produces clear conclusions about the best way to treat diseases. Unfortunately, determining the best course of treatment for actual patients is not that straightforward.The fundamental problem is that healthcare decisions are not simple yes or no questions. Patients rarely have only one medical condition, and the physician must weigh the likely efficacy of alternative treatments for a patient who often differs greatly from the subjects in a clinical trial or an observational study. Moreover, we are severely limited in our ability to collect adequate data, and methodological challenges in the use of such data abound. Electronic medical records can help here, but we have been talking about health information technology (IT) for several decades and have yet to have a functioning health IT system. Controlled clinical trials are a kind of gold standard for assessing treatment efficacy, but comparative studies would require much larger, more time-consuming, and more expensive trials than would be practical to implement. Observational data may provide an alternative basis for analysis, but such data also have limitations.Many politicians are drawn to comparative effectiveness analysis, hoping that evidence-based medicine will allow painless spending cuts in government health programs. If we eliminated coverage for a treatment that does not work, the savings could not be viewed as a sacrifice by patients or a reduction in benefits (although healthcare providers may not take the same benign view of such a policy). In other words, difficult political judgments would become technical decisions, absolving policymakers from having to make hard decisions.However, someone—the physician—will have to make those hard decisions for patients with multiple conditions and other complications who fall outside the limits of even the most thorough comparative effectiveness study. Insurers and government will have to build in flexibility in their coverage and payment policies to account for patients with exceptional and justifiable needs. Such policies will have to balance the needs of patients, the incentives for innovation, and the cost of healthcare. That''s a tall order.Over time, we will improve our ability to collect and analyze patient data, and increasingly financial and treatment decisions will be driven by a growing body of hard evidence on efficacy. The alternative is what we have now—a system of coverage and treatment decisions that is only partly informed by what we could, in concept, already know about what works for whom in healthcare. And where there is no systematic application of scientific knowledge that we could already use, even with the inadequacies of our current system. Insurers continue to make coverage decisions by asking a committee of physicians to examine research studies with inherent limitations, applying their judgment and experience in a consensus process. Although such committees typically include well-trained and thoughtful experts, they can only know the slice of the world they are familiar with. Often, the coverage policy does not reflect the inherent uncertainties of this deliberation.Henry: Would you say that right now we are at a shrill level, where the healthcare debate is waged in very adversarial terms?Antos: Adversarial, and likely to get worse, given the rising political tensions over healthcare as demonstrated in the presidential campaign. The shrillness may soon be at a frequency that only dogs can hear, but it will still be painful for patients, physicians, insurers, and suppliers. We must quit looking for scapegoats, because all of us have some responsibility for unnecessary spending and poor decisions. We need to begin to collect the information that already exists on treatments, outcomes, and cost so that we can understand the pattern of our decision-making at all levels.The scientific facts only take you a part of the way to a sensible health system. We must also look at the financial incentives and other factors that drive decision-making. What motivates physicians? Partly a sense of professionalism, partly medical school training that the doctor may have received 15 or 20 years ago, and partly new information the doctor could be getting through electronic means that may prompt a better treatment decision. Technology can help. For example, electronic prescribing systems can be designed to give the physician important clinical information as well as identify what the drug will cost the patient, and whether there are possible substitutes. This may lower cost for the patient and may also prompt busy physicians to look more closely at the patient''s condition, and whether they are prescribing the best course of treatment.Perhaps the most powerful motivator for constructive change is payment. Financial incentives drive the system, and changing those incentives will change the system. We saw this in the mid-1980s, when Medicare shifted from cost reimbursement to prospective payment for hospitals. Private insurers quickly followed suit. The result was a substantial increase in efficiency and an improvement in the delivery of inpatient care. We went almost overnight from long hospital stays that kept beds filled and money flowing under cost reimbursement to shorter stays and a shift to preadmission testing on an outpatient basis. The orientation of hospitals went from holding on to patients to treating them expeditiously and discharging them as soon as possible, since under prospective payment a hospital no longer received additional payment for another day''s stay. Smart payment systems breed smart healthcare delivery, but it can be difficult to devise payment systems that work well.Payment also drives medical innovation, including the development of new pharmaceuticals, an area that has proved challenging for Medicare. The patent system grants a period of marketing exclusivity—in other words, a monopoly—to successful drug innovators. That gives the innovator an opportunity to recoup the typically large costs of bringing a new drug to market, particularly if the drug is the first in its class and faces little or no competition. Medicare has long covered physician-administered drugs through its Part B plan, substantially overpaying physicians for those products based on a formula. Recent changes in the formula have brought the extent of overpayment down, but the new formula also has flaws.With that background, the recent controversy over ESAs begins to make sense. ESAs represent the largest single-drug spending category for Medicare Part B. ESAs improve the ability of very sick patients to function normally, relieving them of the chronic fatigue brought on by a low red blood cell count. If ESAs were not available, the only alternative would be blood transfusions for many of these patients. There are concerns about the potential for overdosing, and there is scientific debate over which patients, with which conditions, would benefit from treatment with ESAs. There are also concerns that financial considerations may have prompted overuse and inappropriate use of this drug class.In my view, the line between the FDA and the Centers for Medicare & Medicaid Services (CMS) in their respective responsibilities to regulate the pharmaceutical market blurred in the recent ruling affecting the use of ESAs. The FDA is responsible for ensuring the safety and efficacy of pharmaceuticals; CMS, through Medicare, is responsible for ensuring that appropriate payment is made for appropriate medical treatment. However, payment drives medical practice. Medicare''s recent coverage decision effectively dictates the clinical circumstances under which ESAs will be used for Medicare patients, and private insurers were quick to adapt similar policies.The chronology of events is interesting. Faced with new preliminary findings suggesting that dosing standards should be lowered, the FDA convened an advisory panel that met in March 2007 but failed to draw clear conclusions about the appropriate dosage. Subsequently, warning language that had been on the label was elevated to a “black box” status, without strengthening the language.Within 2 months of that meeting, CMS issued a proposed national coverage decision affecting cancer patients whose physicians prescribed ESAs. It offered a detailed explanation for limiting ESA dosing regimens and the range of conditions Medicare would cover. The proposed decision eliminated payment for ESAs for a variety of cancers and cancer-related conditions, and it effectively prescribed the course of treatment for patients who were covered, by requiring that hemoglobin levels be maintained within tight boundaries. This ran counter to long-established (20 years) successful medical practice with ESAs. Oncologists rose up in a fury over this; patients protested; but the final coverage decision was made only slightly more flexible.Henry: The American Society of Hematology (ASH) issued a formal declaration opposing this. They had been consulted before the decision was made and were aghast that their official guidelines were roundly ignored. So here we have this intersection of the FDA, CMS, and ASH.Antos: Yes, and each of those entities has a potential conflict of interest. ASH advocates for patients, but its members also gain financially by a favorable Medicare coverage decision. CMS is charged with paying for appropriate care, but they also worry about the bottom line. The FDA regulates the introduction of new drugs to ensure safety and efficacy, and it has been under increasing political pressure that has pushed toward the safety side of the equation. When he was FDA commissioner, Dr Mark McClellan emphasized the parallel risks that the FDA must balance: the risk of harming patients from approving a new drug, and the risk of harming patients from withholding approval of a drug that offers therapeutic benefits. So, there is a balancing of risks in the FDA''s approval process.Henry: The eternal yin and yang. The FDA is going to emphasize that drugs are safe or effective, but it cannot guarantee that drugs will be perfectly safe and perfectly efficacious.Antos: Exactly. The regulatory pendulum swings between the goals of safety and efficacy, but lately it seems to be moving more toward safety. CMS has its own yin and yang challenge. By law, Medicare cannot dictate the practice of medicine, but dictating the payment for medicine does dictate the practice of medicine to a large extent. Obviously, CMS would like to avoid causing their patients great difficulties. They do not want to have to answer to Congress because a politically sensitive group of patients is not getting access to necessary treatment. But CMS is also under pressure from Congress about cost. Healthcare providers have the same problem. They want to do what they think is right for their patients, but they also profit from the services they deliver.And patients in the Internet era are much more informed than they have been, but most patients are not in a good position to make clinical judgments. With certain diseases, the patient will know immediately if something has gone wrong. For example, a patient being given an ESA will know when his energy level has dropped, an indication that he might need an increased or an additional dose. But a patient''s impression may be misleading, and there are many factors that determine how a patient reacts to a drug. Moreover, patients generally cannot know whether a treatment is putting them at increased risk for serious complications. That is a judgment call based on the clinical evidence but tempered by the unknowns posed by the specific patient who may be far from average in the way his body reacts to the therapy. What is the right course of treatment for me, not for some statistical average, is the important question, which is often difficult to answer with any certainty.Henry: It is that gray line again, especially as ESAs do not increase longevity but rather quality of life.Antos: What has been proved is that ESAs do what they are supposed to do. They enable the patient to make it through the day. And patients with more energy are more likely to adhere to their treatment regimen, more likely to do what is necessary to stay alive. Medicare pays for many treatments that do not extend life but improve quality of life.Another aspect of this controversy is how good were the studies used as evidence? And how reliable was CMS''s interpretation of those studies? Again, it goes back to this gray area of healthcare. It is unlikely that a single study or group of studies could give us clear evidence of how a treatment should be used without any uncertainty, or without the need to make exceptions based on the specific patient.I find it particularly concerning that CMS''s decision is different from the FDA''s label. The label states clearly that dosing should seek to maintain a patient''s hemoglobin level between 10 and 12 g/dL, yet the CMS coverage decision permits payment when the level is below 10 g/dL.Despite official denials, this looks like a disagreement between the 2 agencies on the science, and it raises questions about their respective roles. To what extent should the latest scientific judgments drive Medicare coverage policy, and vice versa? Is CMS operating on the medical science or on cost-containment grounds here? This is likely to be a continuing controversy, given the inherent scientific uncertainties associated with any medical treatment.Henry: And meanwhile patients are in limbo?Antos: They are not in limbo, since the coverage decision is binding. Given the cost of the drug and the difficulty of challenging such decisions for a single patient, the vast majority of physicians will conform their treatment protocols to fit the CMS ruling. That means patients will be taken off ESAs once their hemoglobin level exceeds 10 g/dL. Some patients will be put on a biological rollercoaster, going on and off the treatment as their blood levels change. Obviously, hemoglobin levels fluctuate, but the payment standard is perfectly rigid. Some patients who previously would have had continuous treatment with ESAs will now be required to go on and off, with the inevitable consequence of periods of extreme fatigue. That won''t be good for their quality of life, and it may have an impact on their overall health status.Henry: While the private insurers and employers may have differing views on where to set coverage, with Aetna deciding that 10 g/dL is appropriate but SIGNA deciding on a different level, CMS is a monolithic purchaser of healthcare. This could be loosely called the “California effect,” where the trends all start in California and drift East, and the trends that started with CMS drift over to the private industry.Antos: Yes, but it is more powerful than that. Medicare is probably the dominant payor for this class of patients, thus Medicare policy will be even more important for cancer patients than for the average person. And what Medicare decides to do will greatly influence what Aetna, Humana, Prudential, and other insurers decide to do. One can expect private insurers to line up behind the Medicare coverage decision, since that decision may seem more conservative medically, and tighter coverage limits can save money. And let''s not forget that the new coverage decision could open up a basis for malpractice liability. One could imagine litigation over a patient suffering adverse consequences, where the first piece of evidence in the case is the fact that the insurer covered ESA treatment for patients with hemoglobin levels above 10 g/dL.Henry: The litigation threat is one of the other drivers of utilization.Antos: Yes, and in this case, less utilization.Henry: So less utilization is legally, not necessarily medically, safer?Antos: I''m not a physician, but that appears to be the case. The implication is that Medicare coverage and payment policy will have a very powerful impact on the pharmaceutical industry, more so than we have seen in the past.Henry: In the biologics area?Antos: Yes, although Medicare will probably move carefully here because of the newness of such products and the targeting of small patient populations. That may mean that Medicare will take a wait-and-see attitude. The traditional approach to coverage is wait to see whether a new, expensive biotech drug becomes an essential part of the community''s standard of practice. Medicare may use the Coverage with Evidence Development (CED) process for these drugs. There will be political, as well as clinical, reasons to do that. But whereas CED is a way CMS has adopted to allow limited coverage for expensive treatments, it is unclear that coverage could be withdrawn if the drug proves to be only modestly efficacious; that remains to be seen. Given the high financial and political stakes, Medicare will be loath to rush into anything and will want the private insurers and the medical community at the local level to lead the way.The new biotech drugs will pose a harder problem for CMS. Medicare will exert more pressure on manufacturers for supporting evidence, genetic testing or protein markers, or other ways of identifying the patient population who would most benefit from an expensive new biotech drug.Henry: So that is the only true cost-containment tool that has any practical utility for biologics.Antos: If there are reliable ways of distinguishing among patients. I suspect that we have a long way to go before tools such as genomic testing are widely available, and even longer before they are used routinely as part of Medicare or a private insurer''s decision about payment.How do we square the circle between rising healthcare costs and scientific uncertainties? We must recognize that resources are finite, and eventually we will have to make hard decisions about how we want to divide those finite resources between healthcare and other forms of consumption. That will require a change in the unrealistic but common view that health insurance should pay for every medical intervention that might confer some benefit on the patient. This problem cannot be solved solely by technical judgments about the comparative effectiveness of alternative treatments, since the resource constraint is an absolute limit on consumption. Consequently, we must discard the hope that science will solve the health financing crisis in a way that is totally painless, with unnecessary treatments eliminated and everyone getting all the care that could provide some benefit, regardless of cost. Even with good information on the efficacy of alternative treatment, we will not be able to avoid the value judgments that will be forced on us by resource limitations.Henry: You said that the FDA has safety advocates and efficacy advocates. Is there a similar division within CMS: cost-containment versus quality advocates?Antos: Yes, but I would characterize the safety/efficacy debate as one that is weighed by decision makers in both agencies rather than between advocates. Of course, experts can disagree about the relative importance of safety and efficacy in considering a specific case, but both issues are considered. There has been a rising consciousness in CMS about the importance of quality and access to treatment as well as cost. A similar evolution in thinking has occurred among private insurers. Responsible CMS officials worry about the balance between cost and efficacy in every decision they make. And reasonable people can disagree about how well they maintain that balance in Medicare policy.?

AHDB Stakeholder Perspective

CMS Coverage Policies for Biologics: Defining a Lagrangian Point for Cost, Quality, and Access

Biopharmaceuticals—including such diverse entities as antibodies, recombinant proteins, and vaccines—provide a convergence point for the interests of all stakeholders in healthcare delivery.These agents are characterized by remarkably diverse and innovative mechanisms of action that create a compelling rationale for therapeutic use in life-threatening or chronic, debilitating disorders, while simultaneously challenging all traditional management mechanisms about cost and access, such as tier placement, patient copays, and prior authorization. Because the molecular basis for activity can preclude application across all patients with a given clinical phenotype, prudent use may require evaluation of genetic and phenotypic hallmarks to identify patients with optimal prospects for response; that is, fractionating a hitherto-homogeneous medical condition into multiple “orphan” indications, by restricting the therapeutic target and creating a portfolio of recommendations where therapeutic substitutions are neither possible nor appropriate.Similarly, the molecular basis of activity of many biopharmaceuticals invites (mandates) exploratory evaluations of efficacy and safety in other therapeutic areas, where pathophysiologic mechanisms share common features (tumor necrosis factor inhibitors in rheumatoid arthritis vs ulcerative colitis). Structuring evaluations to maximize the value of repetitive “N of 1” experiments in which every physician–patient transaction seemingly becomes an opportunity for research is a burgeoning area of interest, where all stakeholders can contribute.Because therapeutic value is weighted differently by different stakeholders, development programs also must incorporate measures that resonate with multiple audiences as a condition of commercialization. Expressed methodologically, this imperative results in prospective evaluation of subgroups, accelerates the use of patient preference and quality-of-life assessments, and extends the length of formal observation before and beyond the time of registration, to assess long-term safety and inform adjustments in dose or regimen due to concomitant medication or illnesses (“researchers worship at the mean, clinicians use the standard deviation”). Biotechnology products have biological properties, routes of administration, and therapeutic targets that challenge conventional research, regulatory, and commercialization processes. Defining a Lagrangian point that balances cost, quality, and access provides a template for pharmaceutical product development in the 21st century.Michael F. Murphy, MD, PhDChief Medical Scientific Officer, Worldwide Clinical Trials     

Asset tracking: what it is and whether it's right for you

This Guidance Article examines asset tracking technology, reviewing what it is, how it works, and how it can be applied in the healthcare setting to help hospitals better manage medical equipment. The article also offers guidance to help healthcare facilities determine whether (or when) they should consider investing in asset tracking technology. Asset tracking refers to the ability to detect, identify, and locate assets-infusion pumps, wheelchairs, or just about any other object or device--at any time, as well as to record the physical locations of those assets over time. Though already commonplace in some industries, tracking technology is still relatively new to healthcare. As a result, the systems, the companies that supply them, and even the applications for which they can be used are still evolving. While some healthcare facilities could see almost immediate benefits from implementing an asset tracking system now, others would benefit from waiting a little while for the marketplace to develop further. This article provides information to help hospitals determine which option will be best for them. For facilities that choose to start the system selection process now, we outline factors that should be considered.     

ProvenCare: Geisinger's Model for Care Transformation through Innovative Clinical Initiatives and Value Creation

Geisinger''s system of care can be seen as a microcosm of the national delivery of healthcare, with implications for decision makers in other health plans. In this interview, Dr Ronald A. Paulus focuses on Geisinger''s unique approach to patient care. In its core, this approach represents a system of quality and value initiatives based on 3 major programs—Proven Health Navigation (medical home); the ProvenCare model; and transitions of care. The goal of such an approach is to optimize disease management by using a rational reimbursement paradigm for appropriate interventions, providing innovative incentives, and engaging patients in their own care as part of any intervention. Dr Paulus explains the reasons why, unlike Geisinger, other stakeholders, including payers, providers, patients, and employers, have no intrinsic reasons to be concerned with quality and value initiatives. In addition, he says, an electronic infrastructure that could be modified as management paradigms evolve is a necessary tool to ensure the healthcare delivery system''s ability to adapt to new clinical realities quickly to ensure the continuation of delivering best value for all stakeholders.Robert Henry: Two recent articles on ProvenCare discussed Geisinger''s innovative approach to patient care.1,2 Could you provide a quick synopsis of ProvenCare, and consider whether this system could help transform US healthcare from a sickness-based to a wellness-based system?Ronald A. Paulus: Geisinger''s approach to patient care can be seen as a microcosm of the broader national landscape of healthcare delivery. ProvenCare represents 1 of the 3 core strategies that comprise Geisinger''s healthcare system of quality and value initiatives that are transforming care. These 3 strategies are: (1) Proven Health Navigation, which is our name for our advanced medical home; this means wrapping a bundle of services around a patient, or a consumer, and his/her family. The goal of Proven Health Navigation is to address healthy behaviors, disease prevention, and disease management once a patient has past the point where prevention is no longer working; (2) ProvenCare, whose model recognizes that no matter how well we incorporate prevention strategies, even with the technology and the knowledge base we have today, a certain percentage of patients (ideally a declining percentage) will ultimately require an acute intervention. And ProvenCare is all about optimizing that intervention and rationalizing the reimbursement paradigm for that intervention, as well as engaging the consumer more actively in his/her own self-care during the time of intervention; and (3) transitions of care, recognizing the many handoffs between outpatient and inpatient, between inpatient and outpatient, between inpatient and nursing home, between home and nursing home—particularly vulnerable points for ensuring care safety, quality, and efficiency.So to answer your question about transforming the US healthcare system, the ProvenCare model cannot transform our healthcare into a wellness-based system by itself, but the combination of those 3 strategies—with ProvenCare as its central component—can move us quite far toward that goal.Henry: What gave Geisinger the sense that it could get tracking for this idea?Dr Paulus: It was the leadership of our board of directors, headed by our Chief Executive Officer (CEO), Glenn Steele, Jr, MD, PhD, who observed that the reimbursement status quo no longer made sense.1 The current reimbursement system includes, although not intentionally so, perverse incentives. Clinicians are paid more if their patients'' outcomes are poor rather than good, because they are paid more for addressing complications of care. All providers recognize that if they have more office visits, their reimbursement increases; if they do more interventions, they are reimbursed more dollars. At the same time, there is a lack of focus on preventive services and on patient education. There is no emphasis today on disease prevention.That led our board of directors to challenge the medical leadership to do something innovative about pay-for-performance (P4P),1 to rationalize reimbursement by involving the consumer, the care-delivery system, and the payer in the process, and by aligning the incentives for improved outcomes across the board. The result is an innovative model of payment whose goal is not just to measure performance steps as process metrics but rather to actively do something to affect better outcomes.Our CEO suggested a program that would incorporate all the current best practice evidence into a series of steps of care, document the steps of care being delivered, and bundle together the entire care process.2 He challenged our medical leaders to take on the initiative, and the Director of Cardiothoracic Surgery, Alfred Casale, MD, stepped up to the plate.Henry: One of the goals of this journal is the alignment of stakeholder incentives. How do you get all the stakeholders—patients, providers, payers, and others—to win in this environment?Dr Paulus: When we discussed the new approach with our payers, they suggested that we should look at different ways of implementing this process. Ultimately we also discussed this with buyers (ie, self-funded employers) and with our own health plan. We introduced to them this model of all-inclusive professional services, hospital services, and the idea of a preoperative through 90 days postoperative “warranty.” The 90-day care warranty balanced all these considerations and made this process acceptable to everyone. Because Geisinger is an integrated healthcare delivery system, it was easier to establish the program.It was important to align incentives so we could have a dialogue. Among other things, we created a steering committee that included payer representation, the clinical enterprise representation, as well as surgical and professional group practice representation. As chair of that committee, I functioned as a “neutral facilitator”—a facilitator across all those different parties.

KEY POINTS

• ▸ Geisinger''s integrated healthcare delivery system comprises an advanced medical home, the ProvenCare model, and transitions of care.
• ▸ A key component of Geisinger''s approach to healthcare is an innovative model of incentives for the consumer, the provider, and the payer.
• ▸ ProvenCare''s unique approach to risk management revolves around a 90-day so-called care warranty (for participating payers), initially applied to elective coronary artery bypass surgery but has since been expanded to other procedures, including hip replacement surgery, knee replacement surgery, perinatal care, angioplasty, and cataract surgery.
• ▸ In the short-term, Congress is not overly concerned with cost control relative to stimulus of the economy. The policy over the next year is not likely to be very motivated by demographic or by social problems.
• ▸ “Quality” and “value” represent the bottom line for Geisinger, which strives to create an all-inclusive delivery system that offers best value for patients, payers, and providers.
• ▸ Applying electronic infrastructure in healthcare is necessary today. Within the Geisinger medical home, the routinization of processes with electronic infrastructure enable all providers to practice to their outmost capacity.
• ▸ The lesson drawn from the Geisinger experience is that such an approach could be successfully applied to other plans, and with other payers.

Although we have an integrated delivery system, each operating unit has its own budget, its own financial and clinical quality goals, and its own metrics, against which it is being measured. And 2 of our 3 hospitals are open-staffed, that is, they have a mix of Geisinger-employed and non-Geisinger physicians.We also had to confront real-world issues, such as—if you are getting a bundled payment, how do you pay fee-for-service physicians who are not part of this system? But we all realized that the current payment model did not make sense, and there had to be alternative ways. ProvenCare is a nice half-step between the traditional fee-for-service approach and capitation; it aligns incentives but around specific things that are far less comprehensive and far less prone to underutilization than a pure capitation model.The big leap of faith that had to be taken to implement this approach involved a half-step forward by the clinical enterprises and a half-step forward by the payer. The payer agreed to a bundled rate that included all the evidence-based services that are required, which meant they were funding the care that people truly needed. And the clinicians said they could improve patient care by doing all these process steps correctly 100% of the time and hardwiring those into the electronic health records (EHRs) infrastructure of the organization.Henry: Could you briefly explain your innovative approach to risk management?Dr Paulus: Geisinger addressed risk in 2 ways: First, we agreed to accept a bundled rate—including a 90-day care warranty—so if things go awry, we absorb the cost of care. Second, those responsible for the clinical services said they could likely reduce their readmission rate as one measure of complication. This meant we give back 50% of the cost of our historical readmission rate to the payer upfront, in exchange for locking the future 50% of the historical readmission rate. We figured that if we reduced our readmission rate by more than 50%, it would be an opportunity for incremental profit margin creation on the clinical enterprise side.It also means immediate gain for the payer, because whether or not we reduced the readmission rate, the payer saves 50% of what the payer would have paid historically, in addition to getting a locked-in bundled rate; so any given buyer has less risk of an outlier case.Henry: Fascinating. And is this related to the coronary artery bypass graft (CABG) surgery used in ProvenCare?Dr Paulus: Although this was initially applied to CABG,2 we have since applied that principle to several other procedures, including hip surgery and cataract surgery, as well as angioplasties. We are now actively delivering and working on bariatric surgery and on a perinatal program. The perinatal program covers the duration of pregnancy, delivery, and the postdelivery follow-up period.We have also added chronic disease optimization initiatives for coronary artery vascular disease, diabetes, chronic kidney disease, and most recently a preventive care bundle, where we optimize care in the same way. But instead of applying the same sort of bundled payment rate, we apply performance metrics and bonuses more akin to traditional P4P. It is easy to figure out when CABG starts, and what the follow-up period is. Similarly, it is relatively easy in perinatal care, given the nature of pregnancy and delivery, what those periods are. But when it comes to chronic conditions, such as diabetes, which last a lifetime, defining the bundle''s appropriate window period isn''t as clear-cut.For acute intervention, the 90-day warranty is only for events related to the procedure, such as surgical wound infection, required follow-up, or extended cardiac rehabilitation.Henry: And is reaching consensus among different clinical schools of thought more complicated in relation to chronic diseases?Dr Paulus: ProvenCare''s clinical approach to CABG surgery applied the 2004 American College of Cardiology/American Heart Association guidelines for CABG surgery.3 It was initially difficult to reach consensus among all the clinicians even in relation to those guidelines. For this reason, we gave each clinician the guidelines that he or she was most skeptical of and asked them to review the literature, agreeing to revise our model if they found the guidelines lacking. However, after reviewing the literature, the clinicians agreed, with no exceptions, that these guidelines were the right ones to follow.In part it was an attempt to take advantage of existing guidelines and in part to engage the clinicians and acknowledge their skepticism, by asking them to come up with the evidence. Another subtle but absolutely critical aspect of this approach is that even with guidelines, we allow clinicians to opt out of the guideline for any reason related to the procedure; the only requirement is that they document the reason for it.Our experience shows that very few opt out of the guidelines. We track 40 different components on every patient undergoing CABG.2 We have had hundreds of patients who had undergone CABG, so 250-plus times 40 is a large number, but we have had less than a handful of opt-outs. Nevertheless, the ability to opt out and the fact that the procedure is not being dictated to them, provide clinicians an appropriate degree of freedom and comfort.Henry: Does this represent the difficulty in achieving a value-based healthcare system?Dr Paulus: For Geisinger, quality and value are the bottom line. Quality and value are intrinsic to our integrated delivery system model, because we have the payer and the provider sides of our organization. Ultimately, as an integrated healthcare delivery system we wanted to optimize quality and value to create a competitive differentiation for our health plan. That way we could offer a product to the marketplace that is a win-win system for the payer and the provider. It may be a provocative statement, but in today''s healthcare marketplace, very few stakeholders are truly concerned with quality and value. And those who could or should be do not actualize it. The reasons vary by stakeholders.Payers are not concerned with value because they are regulated or pseudoregulated and essentially make a fixed profit margin; therefore, the higher the total spending, the more money they make. So at the end of the day, I am not sure what would be the incentive for an insurance company to lower cost or to enhance value. For example, if premiums actually fell, and fell year after year, as in the case of personal computers, insurance plans would not like that business model.Providers have not necessarily had the desire to increase quality and value, because they either do not accrue any benefit other than psychological, mission-based, or professional-based benefit, or they are actually penalized for it. For example, if a hospital invested in remote monitoring devices for its patients and was able to reduce readmissions by 50%, and if it is not an integrated system with a payer, this would reduce its revenue from potential admissions, meaning that it could not cover its fixed operating costs.Patients are also not concerned with cost, because they have not borne a high degree of out-of-pocket cost, traditionally, once they get past their deductible; thus they have not had any incentive to manage costs. And, as for quality, they assume that they get it every step of the way.Employers have probably been in the most painful position; they either have not had the buying power to be able to effectuate the desire to have better value, or they have traded off convenience and geographic proximity to their employees over value.So the US healthcare system lacks players who truly care about value for their own population, although everybody cares about value at the societal level. No one is instigating the desire for value creation in the current healthcare system, which is not like a traditional, consumer-driven market, where people are paying out of pocket and vote with their dollars (which is what drives value in that situation).Henry: Does value creation also relate to reimbursement issues and stakeholder collaboration?Dr Paulus: Indeed. We recognize that we are never going to be a hermetically sealed organization (such as the Kaiser Foundation), in which we insure the population and provide the care for that population only. But the more efficient we can become, and the more quality and value we can provide, the more we help the payer. It helps us have a higher profit margin on other payers, while offering competitive rates.When we look at the current and looming healthcare crisis in Medicare and Medicaid, it is clear that over time reimbursement will become an issue. We have to prepare our delivery system to be successful in that Medicare/Medicaid environment; if we can be successful there, we can be successful anywhere.This relates directly to value creation—recognizing that this value needs to be shared across the consumer, the payer, and the delivery system. We are trying to create the value that enables that sharing to happen.Because Geisinger has an integrated delivery system, we decided we could afford to care about quality and value, and in patients for whom we provide the majority of the care we could afford to take risk—we could innovate—and make investments in the value creation. And we accrue that back. We can also apply that value principle to other markets or other payers.We provide the same clinical care with ProvenCare, regardless of who the payer is, but our own insurance company is the only firm that reimburses us (we have not been approached by other payers). We can selectively choose when to deploy that component of ProvenCare to other payers. So our 3-part strategy has improved resource utilization and has led to improved patient outcomes,2 which is the true value.Henry: What is the role of electronic records or other electronic technology in Geisinger''s model of care?Dr Paulus: Applying health information technology (HIT) and electronic infrastructure in healthcare is even more important to being able to scale the activity. We could have been successful in CABG surgery or in any given thing through paper checklists and individual heroism and hypervigilance around processes and people and all that. But that rugged individualist, heroic model breaks down when you want to scale it across tens or hundreds of diseases.To apply this model to a variety of diseases, scaling becomes important. By scaling it, and keeping it from going back to the way things were done before, we need to involve people and electronic resources to monitor the process and report data seamlessly. Using HIT allows you to make the process low cost enough to afford to maintain and scale it, as needed.We know that this knowledge is going to change over time, when new drugs, devices, or the approach to care become available. We are therefore not wedded to any given component of the bundle of things that are part of the overall ProvenCare program, whether in CABG, hip replacement surgery, perinatal care, or in any future ProvenCare initiative. We focused on creating a reliable, reproducible, scalable infrastructure to take whatever the current state of knowledge is and translate that into a reliable care process that could be reproduced over time, thereby enabling the delivery system and care process to evolve with time.A major barrier of technology and its ability to affect care is not whether the technology is good or bad but rather the time it takes—on average 17 years—for known benefits to work their way into more than 80% of healthcare. We have tried to take an existing apparatus across multiple disease areas that can translate new knowledge into practice in weeks or months rather than in years or decades.We are quickly approaching a scenario where working without an electronic infrastructure will be impossible or dangerous. In the ProvenCare model, this is not just an EHR infrastructure but rather it is an EHR system that is in the hands of people who can maintain it, deploy it, and facilitate it. And it will be particularly beneficial for subtypes and subdisease states that complicate the care delivery process. HIT has a great capacity to provide decision support for such care processes.Henry: Could you briefly discuss the way in which your medical home is integrated within the Geisinger approach to care?Dr Paulus: The medical home is a primary care—based function, which is today one of the most undercompensated services at the pediatric and the adult levels. The ProvenCare pilot introduced payment of an incremental fee to the primary care physician and an additional fee to the primary care practice. This amount of reimbursement is not trivial; it could be as high as $20,000 per primary care physician annually.The issue of underpayment of cognitive services is a big deal across many specialties, and in particular in primary care, where preventive services, interventions, and lifestyle interventions have the biggest opportunity.Also, within the medical home environment, and within ProvenCare, the routinization of the processes and the augmentation with HIT infrastructure enable all providers—nurses, pharmacists, physicians, and midlevel clinicians (eg, nurse practitioners, physician assistants)—to practice to their utmost cognitive and licensure capacity.In ProvenCare we have hardwired nurse and midlevel clinician participation in a robust way, because we are going to face a staff shortage no matter how you slice it. Even if the reimbursement model changes now, changing the staff shortage will take a long time, because it involves many years of training in medical school, residency programs, and fellowships.We also need to push the capacity of clinicians to work to the high-end rather than the low-end of their license. These things are linked together directly—as odd as this may seem—to medical home and to ProvenCare; they are directly linked to transitions of care, because of the importance of how the team-based approach works for each of those environments; transitions, medical home, and ProvenCare are all team-based initiatives.Henry: Finally, as mentioned earlier, AHDB is dedicated to the idea of healthcare stakeholder collaboration. Can the ProvenCare model be applied in other plans or by other providers or employers?Dr Paulus: The lessons we have learned from this experience lead us to believe that this approach could be applied and implemented in other plans, and with other payers.We have had interests from providers and payers who have asked us to work with them in other markets, potentially to help facilitate ProvenCare programs in other places. We have also been approached by providers like ourselves (ie, health systems) and by payers to collaborate with them. Increasingly we feel that this approach could be applicable in other markets. There is no reason why other providers and payers could not collaborate in a similar manner.In addition, from Medicare''s perspective, there is an interest in episode of care-based payment demonstrations, including the current one that has recently been announced. A group called Prometheus is looking at this from a payer perspective—how to model these episodes; how to create warranties around care. They have been partially informed by what we have done with ProvenCare, and we have likely been partially informed by what they have done. So there is a broad sense that the current piecemeal payment model does not make sense in the long-term.We have looked at some of the things that the Centers for Medicare & Medicaid Services has been trying to do, and we are participating in the physician group practice demonstration projection.The episode-based demo is another good idea. The work the Commonwealth Fund is doing around highperformance delivery systems is important, and our CEO, Dr Glen Steele, is involved in this. We have worked with the Institute of Medicine concerning the learning healthcare system—how do healthcare systems learn and reproduce that knowledge and redeploy it quickly.The work of the Agency for Healthcare Research and Quality is very important, and so is the work done at some of our peer institutions around the country, such as the Mayo Clinic and the Cleveland Clinic. We are looking to collaborate with and learn from our peers as much as we can.Finally, Geisinger''s model of care can accommodate significant changes quickly, to ensure flexibility and adaptability to new clinical realities and guidelines, as well as administrative needs—all geared toward the goal of creating and sustaining best patient outcomes at optimized costs. The Geisinger experience exemplifies a successful approach to healthcare transformation that could be applied to other health plans, as well as help transform the US healthcare system by aligning the needs of all stakeholders, containing costs, and improving outcomes.     

Translating words into actions: are governments acting on the advice of the World health report?

Every year, WHO produces the World health report: the 2005 report concentrated on maternal, neonatal and child health. But what is the value of these reports? Are they ritualistic publications designed to promote WHO, or are they worthy of proper discussion and debate? One would think that given the current crises in global health, the annual report of the UN''s primary agency for health would be important. However, unless there is evidence that these reports are taken seriously, discussed and debated, and shown to have an effect, a conclusion might be drawn that they are largely insignificant. And that would consign WHO to a level of insignificance that it does not warrant. In this discussion of the 2005 report, I aim to provoke a response from both WHO and the international health community to demonstrate that the annual World health reports are meaningful. Furthermore, I suggest here that WHO shows its commitment to the recommendations of the 2005 report by monitoring how well recommendations have been taken forward.     

Risk management and legal issues with the use of social media in the healthcare setting

Social media have infiltrated all of our lives, both personally and professionally. Most of us could never have envisioned the impact that social media have had on us, particularly in the healthcare arena. Who would have thought even five years ago that a discussion on the ASHRM exchange would involve the use of Twitter in the operating room or that a physician would be reprimanded by a state medical board and have her privileges revoked due to posting information online about a trauma patient? In the coming years, social media use will only increase, causing concern for risk managers across the continuum. Furthermore, although case law and statutory regulations addressing the use of social media are minimal today, it is anticipated that we will see legal challenges to this evolving medium in the future.     

Accountable Care Organizations in the Era of Healthcare Reform

Under the Patient Protection and Affordable Care Act (PPACA) of 2010, Medicare providers, including physician groups and hospitals, will soon have the option to form accountable care organizations (ACOs) to improve quality and efficiency. ACO participants may share financial gains generated from improved clinical and economic performance, provided that quality goals and patient safeguards are met. Through future regulations, the Centers for Medicare & Medicaid Services (CMS) must implement the ACO option no later than January 1, 2012. In this interview, Dr Mark B. McClellan, former CMS Administrator and US Food and Drug Administration Commissioner, discusses the extraordinary implications of the new ACO option for improving patient care and reducing unnecessary costs.Kip Piper, MA, FACHE: You and your colleagues were influential in developing the ACO concept1 and successfully persuading Congress to make ACOs an option in Medicare. Are you surprised by the tremendous interest in ACOs since enactment of the PPACA this year?Mark B. McClellan, MD, PhD: There has been a real expansion of interest in ACOs recently, and some of that is not surprising. The key ideas behind accountable care have been around for a while. CMS has implemented some Medicare demonstration programs previously that potentially use ACO concepts, and a number of private payers and providers have been working on ACO implementation as well. I have been a bit surprised by the breadth of interest. It is a reflection of how seriously providers and payers are taking the healthcare reform law.However, unlike many of the other provisions on payment reform, ACOs will be a real part of Medicare as of 2012, if not earlier; not a pilot, not a demo, but a part of the Medicare program. That may be contributing to the interest too. And finally, there is growing interest in making sure that payment policies fit together to add up to getting better value, getting higher quality, and avoiding unnecessary costs. That''s contributing to the interest in ACOs. It is a confluence of factors, and in retrospect I should not be so surprised by the intense interest in the ACO model.Piper: What are some of the factors critical to successfully implementing an ACO?McClellan: One is a critical mass of providers who are willing and able to meaningfully take accountability for the well-being of a population of patients. This includes a primary care network and other types of healthcare providers, maybe even some providers who are involved in things that are not traditionally thought of as healthcare, such as wellness programs and population health management. But the key thing is that there is a critical mass of providers who are willing to work together and are able to take meaningful steps to get to better health for those beneficiaries.Second, there also is a need for a critical mass of payers. There needs to be enough reform in the way payments work so that steps that traditionally do not make much financial sense—such as promoting better coordination of care, taking steps to reduce complications and readmissions, and exchanging information effectively—make more financial sense. And that takes enough of the payer community to get behind the effort as well.Having both providers and payers simultaneously jump together is a challenge, but there is certainly a growing number of examples of ways to do it successfully. In the end, the success of ACOs is going to depend on actually reforming care so that costs are lower and results are better. It''s not just a matter of getting the critical mass (of providers and payers), but actually having meaningful steps that can be taken. These steps can take a little time, and certainly some effort, to reform the way healthcare works, which requires a commitment of time, effort, and expertise to meaningfully redesign care.Piper: How does the ACO model fit in context with other major reforms, most notably bundled payment, global and episode-based payment reforms, and the medical home model?McClellan: There is a tendency now to look at what is in the healthcare reform legislation and what is being tried in the private sector and states around the country as basically throwing a lot of spaghetti against the wall and seeing what sticks. That is the wrong way to look at these reforms. They all have a common goal of improving care delivery, making it better so that patients are healthier, and making it more efficient so that costs are lower. The best strategy for an organization is to view these as part of an overall approach to getting that result. So, for example, it can actually be easier to implement an ACO successfully by pairing it with a medical home reform.We are seeing many examples of this around the country, where the providers get the support they need for coordinating care and spending more time on patient management by the upfront investment needed to support a meaningful medical home. Payers get some accountability that, by taking these steps (or as they take these steps upfront to support reforms and care delivery), they are going to be able to see what the ultimate consequences are for health and for costs on the back end. That is what an ACO provides. So these reforms can truly reinforce each other. The best way to approach payment reform is as pieces that add up to a more comprehensive and effective whole.Piper: Long-term, which form of payment do you expect will work most effectively with the ACO model—shared fee-for-service savings, partial capitation, or some other form of global payment?McClellan: What we have seen in some early adopters is movement toward having less payment depend on fee for service. But that is not necessarily going to be the outcome. I can imagine some longer-term arrangements where ACOs are operating at a regional level or across a diverse range of providers, where fee-for-service reimbursement may remain a substantial part of payment. The main thing is that ACOs involve setting up a different kind of tracking system for payments than you get with fee for service.In the most basic form of ACOs, with shared savings, in addition to tracking the volume and intensity of services for traditional fee-for-service payments, the organization and its payers will also track some meaningful results for the population of patients being served and per-capita spending. If there are any savings compared with fee-for-service costs, those provide an additional source of reimbursement for the providers.As people get more used to thinking about things that they can do to improve care and to work on improving those patient-focused performance measures rather than just the fee-for-service billing, you can imagine more weight going to this patient-focused payment approach, and it can be gradual. In some examples, it may start out with shared savings. Then, as the providers get more used to working together in this kind of explicit goal-oriented way, as they identify some further steps that they can take together to improve performance, and as they get more comfortable with an explicit patient-level focus, you can imagine putting more weight on the ACO payment model as opposed to fee for service.So maybe reducing the fee-for-service payment by 20% across the board or for primary care services and putting that money into a partial capitation fund would enable the organization to do more to reform care than it can with the resources from shared savings alone. Different organizations may come out in various places. The whole point is to try to support incremental steps that are not too disruptive in the short-term, but that over time could lead to more fundamental improvements and care.Piper: A few skeptics question the readiness of provider organizations in areas such as governance, physician relationships, coordination, health information technology (HIT), and performance measurement. How do you respond?McClellan: Yes, this is hard, especially in the status quo, where it is very difficult for many healthcare providers and provider organizations. Their payment rates are being squeezed. They are facing new reimbursement and regulatory pressures because of rising healthcare costs. Unfortunately, I do not see the status quo getting better. So although this is a real challenge, there are some unique opportunities to support the move toward a different kind of payment, in which providers get better support for delivering better care, not just more squeezes. It makes now a really good time to consider moving forward on addressing these very hard challenges.For example, there is the federal HIT initiative, with Medicare and Medicaid incentive payments for adoption of electronic health record (EHR) systems and meaningful use of EHRs. The objectives of the meaningful use standards are tied directly to improving patient care. This sounds a lot like the goal of accountable care. There are some payments now and over the next few years in Medicare for physicians and other healthcare providers for reporting on performance. That is easier to do if you have an information system in place and if you are actually developing and using information systems to improve care.CMS now has 2 tracks for performance reporting. One is the traditional “fill out another claim form” approach, which is burdensome on providers and does not help improve quality. The other is to submit information from systems used to improve care at the patient level as a registry-based submission to CMS. An increasing number of provider organizations are doing that.There are also other opportunities in terms of medical homes and other payment reforms that can collectively add up to a significant amount of support for addressing things such as governance, effective information technology (IT) use, and improving physician relationships and coordination. But those opportunities are not going to be around forever. I think the next few years are probably the best time to take advantage of all of this support for building up systems that help providers do what they want to do, which is get better results for their patients at a lower cost.Piper: ACOs have been discussed mostly in terms of hospitals and physicians. Does the ACO model hold promise for other combinations of healthcare providers?McClellan: Yes, it does. It is essential to have a network of primary care physicians within an ACO. But there are certainly a lot of opportunities to expand broadly beyond specialist hospitals and other types of traditional healthcare providers. For example, we have heard from a number of communities that already have public health initiatives in place. They want to expand these initiatives to use wellness programs and school-based programs to support ACO goals.State Medicaid programs are finding that if they can expand the support from ACOs and Medicaid to areas like community-based mental health services, they can document some significant reductions in medical costs related to mental illnesses. There are issues that could be addressed through support of care in the community but that are not part of traditional healthcare delivery. I think ACOs actually make it easier to move toward less-traditional forms of delivering care and toward preventing complications and keeping people well. That''s because all these steps in the absence of an ACO run the risk of payer concerns that they may just lead to higher costs and more expenditures. Therefore, some reluctance. With the accountability of the ACO model, it becomes easier to bring in other types of providers, other types of services that may not even be traditional healthcare to get the better results and lower costs.Piper: The Engelberg Center for Health Care Reform, at the Brookings Institution, provides practical solutions to achieve high-quality, innovative, affordable healthcare. What else is the Engelberg Center working on?McClellan: Well, this is sort of high noon for healthcare reform implementation. A lot of people think that the big issues are not coming until 2014, but implementation of reform is under way now. And so we are not only trying to help with effective implementation around accountable care, quality and value, and healthcare payments, but also on other issues, such as evaluating other types of payment reform and other things that may not be viewed as within the traditional reform but probably should be.For example, we are doing work with a network of health plans and EHR systems on developing a better surveillance capability in this country for monitoring the safety of medical products. We have got an IT infrastructure now, incomplete as it is, that could provide much more timely information on potential safety problems. So we need to take steps to use that.Of course, healthcare reform is never done. So we are following up on some of our earlier work on bending the curve in healthcare, with ideas that may be considered in the next round of healthcare reform. The President has a commission on deficit reduction that will report later this year. In 2011, unquestionably there will be more healthcare legislation related to implementation of the new law, funding it, and perhaps building on it. So we are trying to provide some useful guidance for all of that too.What a lot of these projects have in common is a recognition that private sector leadership is needed for real reform in healthcare, and for making our public-private system work better, but that this needs to be aligned with effective federal, state, and local government policies to support shared goals. And one of the things we have tried to do here at the Engelberg Center—as a neutral, expert-oriented think tank—is to help bring together these different perspectives in practical ways to make progress on the big challenges of reform in all of these areas.     

Towards understanding the nature of conflict of interest and its application to the discipline of nursing

Most incidences of dishonesty in research, financial investments that promote personal financial gain, and kickback scandals begin as conflicts of interest (COI). Research indicates that healthcare professionals who maintain COI relationships make less optimal and more expensive patient care choices. The discovery of COI relationships also negatively impact patient and public trust. Many disciplines are addressing this professional issue, but little work has been done towards understanding and applying this moral category within a nursing context. Do COIs occur in nursing and are they problematic? What are the morally appropriate responses to COI for our discipline and for individual practicing nurses? In this paper I examine the nature of ‘conflict of interest’ as a general ethical category, its characteristics and its application to our discipline. Conflict of interest is an odd moral category that may actually or potentially result in immoral decisions. The moral justification for COI is grounded prime facie by the moral value of respect for persons and principle of fidelity from which trust is developed and maintained. In review of the historical development, there appears to be consensus on some qualities of COI that are presented. I conclude that making judgements about COI are challenging and often difficult to determine from a nursing perspective. Improving nurses' and professional organizations' awareness of COI and sharpening our ability to respond appropriately when COI arise can reduce potential harm and promote trust in those whom we serve.     

An introduction to technology for patient-centered, collaborative care

"Patient-centered, collaborative care" is healthcare jargon. But underlying the jargon is the principle that a patient who receives such care strongly agrees that "I receive exactly the healthcare I want and need exactly when and how I want and need it." Currently only about 1 in 4 Americans who have adequate financial resources can make this claim. Think of a pyramid. At the apex is the highest level of "patient-centered, collaborative care." At the base are measures about "what's the matter" (from the clinical perspective) and "what matters" (from the patient perspective). As patients and clinicians act collaboratively on these measures, they climb closer to the apex of the pyramid. Given the realities of healthcare in the Unites States, should busy professionals take time to think about ways to climb pyramids? In this "Introduction" we describe why the answer to this rhetorical question ought to be "yes." In the articles that comprise this issue, readers will learn how technology that supports patient-centered, collaborative care can help bridge the gap between desirable goals and limited time. All the authors understand technology (such as hardware and software), and the way humans use the technology (called techne) will not overcome the many obstacles to the attainment of patient-centered, collaborative care. Nevertheless, we are hopeful that the examples described in these articles suggest ways that significant progress toward patient-centered, collaborative care can be made. The articles are practical. The results are persuasive. It is worth the climb!     

The ethics of care: social workers in an influenza pandemic

Many healthcare organizations and government agencies are making detailed preparations for the possibility of a pandemic of highly virulent influenza. All plans to date have recognized that there will undoubtedly be a greater need for medical resources than will be available. Thus, we will be faced with a situation in which not all will be offered curative care, even if they could benefit from it. Even if there were sufficient amounts of vaccines, hospital beds, ventilators, and antibiotics, there are still expected to be large numbers of deaths as well as stress due to the overwhelming nature of the pandemic. The challenges of caring for the incurable, the uncured, healthcare workers, and the survivors and their families will place almost unprecedented demands on mental health workers. In this article, I discuss these ethical and medical challenges and the role that social workers will be called on to play.     

Are we being forced into isolation?

Do you ever feel a sense of being locked in? Has it been more than a year since you went out for lunch? Are e-mails your main source of keeping in touch with friends and colleagues? What are the issues for our self-inflicted isolation? What am I hearing and seeing? Case managers are saying they do not have time to meet with manufacturers or home care providers, and then the home care providers are upset that no one cares about what they have to offer.     

Overruling uncertainty about preventative medications: the social organisation of healthcare professionals’ knowledge and practices

In this article, we draw on an institutional ethnographic (IE) study of cardiovascular disease prevention in general practice, exploring the work of healthcare professionals who introduce a discussion of risk and preventative medications into consultations with patients. Our aim is to explicate, using IE's theoretical ontology and analytical tools, how troubling patient experiences in this clinical context are coordinated institutionally. We focus our attention on the social organisation of healthcare professionals’ knowledge and front-line practices, highlighting the textual processes through which they overrule patients’ concerns and uncertainties about taking preventative medication, such that some patients feel unable to openly discuss their health needs in preventative consultations. We show how healthcare professionals activate knowledge of ‘evidence-based risk reduction’ to frame patients’ queries as ‘barriers’ to be overcome. Our analysis points not to deficiencies of healthcare professionals who lack the expertise or inclination to adequately ‘share decisions’ with patients, but to the ways in which their work is institutionally orientated towards performance measures which will demonstrate to local and national policymakers that they are tackling the ‘burden of (cardiovascular) disease’.