Del Meyer, MD, Pulmonary Medicine

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Medicare Reform: Pharmacy Benefit ProgramWhat Must Be DoneA Clinician’s Point of View

by Del Meyer

The varying estimates on the Medicare Pharmacy Benefit Program only reveal the hazards of projecting any entitlement program. Once implemented, all government programs increase and the costs are nearly impossible to control. The additional costs to the Medicare Program are not sustainable—even in the short term. Therefore, it is urgent that the program be modified before enrollment starts in a few months.

When Medicare was implemented in 1965, there was a nominal deductible on hospital and outpatient benefits, with an additional copayment of 20 percent for all physician and outpatient services. Had the deductibles and the copayment remained a responsibility of the patient, Medicare would not have experienced a spiral increase, as is the case today. For instance, if every $80 doctor’s office visit required a 20 percent or $16 copayment, only necessary office visits would be made. The copayment, a market restraint, would control utilization and thus costs. Oversight programs to watch and control every Medicare expense would not be necessary. External controls are never patient sensitive; while they reduce one patient’s excessive costs, they also eliminate another patient’s critical test for diagnosis or treatment.

Unfortunately, the insurance industry came to the “rescue” and provided coverage for the deductibles and copayment. This totally removed Medicare from the Medical MarketPlace environment. When patients pay for expensive health care with taxpayers’ dollars, there is no longer a disincentive to overuse. The lack of market-based discipline increases utilization dramatically and costs continue to spiral upwards. 

The increase in cost includes the additional amount needed to pay the Medicare or Medicare-HMO nurse to review the records and report her findings to her supervisor. It also includes the supervisor’s salary, as well as the government bureaucrat’s who receive the data. If the doctor is paid $100 an hour for delivering the medical care, and the “policing” nurse is paid $30 an hour to evaluate and report that care (with every level of oversight at a probable higher cost), the increase is at least 30 percent if the RN and the team spend as much time reviewing the clinical record as the doctor spends in developing the clinical record. The market environment eliminates this increased cost.

But demands for expensive x-ray and laboratory testing, which were relatively free, exceeded a physician’s ability to modify patients’ avaricious appetite. Controls were placed on spending with some services being denied while others were curtailed. Patients threatened to report physicians to Medicare, and actually were encouraged to do so, if they felt they were not receiving the testing they desired. In Congress, a constituent’s desire is presumed to be a dire medical need. Thus, even the imposed controls were difficult to enforce.

If patients were required to pay the 20 percent copayment of all outpatient health care, the initial design of the Medicare law, they would evaluate every physician office visit, laboratory test, x-ray, CT, MRI, emergency room visit, urgent care visit and consultation on a cost-benefit basis. They would decide whether it was worth the 20 percent of an $80 office call to obtain their doctor’s opinion on a sneeze. They would also openly discuss with their physician whether it was worth 20 percent of a $170 chemistry panel, 20 percent of a $120 x-ray, 20 percent of a $300 CT scan, 20 percent of a $900 MRI, 20 percent of every $600 emergency room visit, or 20 percent of every $200 consultation for the additional information they could reasonably expect to obtain. (These estimates are based on data provided by patients or their HMOs.) This is the essence of consumer- or patient-driven health care in which the patient seeks the best cost-effective health care in consultation with his or her doctor.

So, how do we move forward to a point where we’ve previously been - at the inception of Medicare in 1965? By utilizing the Pharmacy Benefit fiasco as the carrot. All Medicare recipients that give up their MediGap insurance and thus pay for their own deductibles and copayments, would receive an unlimited pharmacy benefit at a 30 percent copayment. This would be self-policing by the Medical MarketPlace. Suppose a patient has a high cholesterol level. The physician then discusses the ways of reducing it. Many patients have not seriously considered low cholesterol and low fat diets or inexpensive Niacin, as long as the Statin drugs (Lipitor, Zocor, and others) are free. (Fixed copayments of $5 to $50 are irrelevant in restoring market restraint.) As pharmacy restrictions were imposed, patients demanded that their physicians write letters on their behalf illustrating how their circumstances were unique and that generic drugs never work for them. It takes additional physician and office personnel time to work out the variances in MediGap or Medicare-HMO coverage, as well as patient desires.

However, with a 30 percent insurance copayment plan, the cost savings would be large. It would streamline not only physician office time but also pharmacy time, and it would improve patient satisfaction. The physician would simply write the prescription. The patient would deal directly with the pharmacist concerning the desirability of the proprietary or the generic brand. The patient makes his decision immediately and does not have to wait or return to the pharmacy after the pharmacist and doctor discuss the various Medicare-HMO coverage options for that particular plan, which cannot be ascertained until the patient’s coverage card is entered into the HMO network. These market-based decisions also eliminate any Medicare oversight for pharmacy benefits.

So how does this market-based, cost-containment oversight occur? Why wouldn’t everyone obtain the expensive proprietary drugs? With a 30 percent copayment of pharmacy benefit, patients would automatically request the most cost-effective drugs without any oversight because they are working in a market environment. With a higher priced drug, the percentage copayment increases proportionately. For instance, when the physician discusses the hypercholesterolemia, the patient will frequently make a serious effort to follow a low-cholesterol and low-fat diet. After six months, a repeat cholesterol and triglyceride level may be normal. If still elevated, the patient may prefer inexpensive Niaspan or SloNiacin and perhaps adding flax grain cereal to the diet, which also lowers lipids. After six months, the cholesterol test is repeated. If at this point the levels are normal, dietary and inexpensive treatments have been effective. If still elevated, a Statin may be necessary. The patient can then decide if he wants to pay for a proprietary Statin at say $180 per month (at 30 percent or $54 copay with Medicare paying $126) or be happy with the generic $80 version (at 30 percent or $24 copay with Medicare paying $56). In my anecdotal experience, about 90 percent of my patients would choose the generic version, even though 90 percent demand the proprietary version if both are covered by their Medicare-HMO or MediGap insurance. Thus, the increased cost generated by those few that would pay the $54 rather than the $24 copay, costing Medicare an extra $70 ($126 minus $56) in coverage, is small and certainly much less than the Medicare and Medicare-HMO oversight costs. The other surprising finding is that my wealthy patients would generally pay the generic copayment rather than the proprietary copayment.

Why do we recommend the 30 percent pharmaceutical copayment rather than the 20 percent that the rest of outpatient Medicare requires? In our experience of asking patients what choices they would make with varying degrees of copayment, we have found that significant cost control was reached at a 30 percent copayment rather than the 20 percent copayment of the other Medicare outpatient benefits. Whereas 90 percent would utilize generic drugs at a 30 percent copayment, anecdotally only 60 percent would utilize generic drugs at a 20 percent copayment. Thus, at 20 percent copayment, there would be 40 percent rather than 10 percent utilizing proprietary drugs. This is a four-fold or a 400 percent increase in Medicare costs with a 20 percent copayment rather than a 30 percent copayment. [Although these are clinical projections, they are probably as accurate as any Medicare actuarial projections.]

I had an actuary look at the above data. He spoke under the condition of anonymity because he works for a large health insurance firm. He felt that eliminating the MediGap coverage for outpatient medicine would save at least 30 percent if not 40 percent of current Medicare or Medicare-HMO outpatient costs. Adding the drug coverage at 30 percent copayment would be more difficult to project. However, he felt it would save a similar amount over current Medicare-HMO or MediGap pharmaceutical costs. It would certainly control the currently proposed Medicare Pharmaceutical Benefits by a much larger factor and they probably would not escalate since market-based controls monitor costs at any level without escape. Most private health insurance programs today cap the market aspects of their deductible at some level, e.g., $10,000, when Nirvana kicks in and the entire cost is covered with fake dollars, which produces no utilization restraints.

In Summary: Reinstate the annual deductibles and the 20 percent copayment for all outpatient Medicare benefits. Eliminate Medicare-HMO or MediGap insurance for those beneficiaries that desire a pharmaceutical benefit at 30 percent copayment. (Since many Medicare-HMOs are leaving certain geographic areas, this should be politically possible to implement.) Cancel the current Medicare Drug Benefit Program before it’s implemented in 2006 and over the next decade save the $720 billion (or $1.2 trillion by other projections). This will save Medicare for our grandchildren also.

A Continuing Review of Corporate Socialized Medicine - HMO

by Del Meyer

Last week, we were asked to pull 29 charts for review. (The other physicians in my building received similar requests.) The request came from the Centers for Medicare and Medicaid Services (CMS) and the Medicare-HMO stating that they had entered into a Business Associate Agreement with a vendor in accordance with the Health Insurance Portability and Accountability Act of 1966 (HIPAA). This allowed them to disclose Personal Health Information (PHI) to another covered entity without an enrollee's (patient's) authorization or consent. The purpose was for quality assessment, disease management, competency review of health care professionals, evaluation of physicians’ professional performance and evaluation of health plan performance.

They reminded us that a signed consent from the patient is not required for us to release this confidential information to Medicare, the HMO or the private vendor. They required the use of my duplicating machine, since they were going to copy each patient's entire record for all of 2003 and 2004, and the use of one room of my office for the entire day. Since the duplicating machine is next to our 1000-patient chart file, we reminded them that they could not work in that area because of HIPAA requirements. So they brought their own duplicating machine. They did not feel obligated to pay for the $125/day rent, or for my staff or myself. Since they were looking for specific items, such as patient's demographic data, problem lists, history and physical examination and progress notes, I had to review each chart to make sure the data was in order for their review. Even at 10 minutes per two-year record for 29 patients, that does add up to 290 minutes or five hours of my after-hours time, without pay. How many workers, including professional people like nurses, attorneys or accountants, would be willing to work an extra five hours after closing their office without pay? The medical profession has been taken hostage by the government-insurance complex with the acquiescence of the profession and without a significant fight by either the doctors or their professional organization.

When I inform my patients that their medicare-HMO was in to make photostats of their confidential file, which in the current milieu has to include drug, alcohol and sexual matters, they react in horror that the government can intrude to such an extent.

The contract worker for the day stated that when the government completes the Electronic Medical Record (EMR) requirements currently on the federal health care agenda, it will be much easier for them to acquire every patient's record electronically from every doctor or hospital that sees Medicare, Medicare-HMO or Medicaid patients. If the government ever controls the electronic medical records in this country, they can more easily transfer every medical record into their own computers. With four million federal employees reaching into every major city throughout the country, every patient could have a federal employee that knows them and probably could access their confidential file. That would be equivalent to publishing the patients confidential record in The Wall Street Journal, The New York Times, and the Los Angeles Times. Since there are so many federal contracts with states in health care, the states have an additional 18 million employees in their work force. We all know state employees who would love to access our confidential file. That would be tantamount to publishing the patient's medical record in every major newspaper in every state of the country.

We've accomplished more government intrusion with HIPAA in this country than the Bolshevik revolution ever dreamed of and without firing a single shot.

Shaken Baby Syndrome (SBS)

by Del Meyer

Publicized Shaken Baby Syndrome (SBS) charges or convictions have now risen to two a day. Prosecutors like these cases because it gives them almost guaranteed high-profile convictions. Jury acquittals are very rare, though I see that defense testimony by Dr. Janice Ophoven, a pediatric forensic pathologist from Minnesota, just won a jury acquittal yesterday for a teenage babysitter accused of SBS in Colorado. He faced 48 years in jail if convicted.

Here are five SBS examples from just the past two weeks (article excerpts below):

1. Boyfriend faces 25-years to life for SBS of a girl who had fallen to a pavement days earlier.

2. Father faces 1st degree murder for SBS; denied child abuse but admitted "bouncing" baby.

3. Boyfriend charged with SBS despite lack of any external injuries.

4. Pregnant babysitter charged with SBS: prosecutor stated that "no evidence that anyone [else] caused the ... death."

5. Father sentenced to nine years for SBS that he adamantly denies.

These common themes underlie the prosecutions:

1. Mothers are rarely tried for SBS, but fathers, boyfriends and babysitters frequently are. Prosecutors exploit juries' prejudices.

2. Possible natural causes of death by infants are ignored. As in the fourth story below, prosecutors take the view that the defendant must be guilty because no one else could have done it.

3. The "confessions" to shaking are usually descriptions of an attempt to revive the infant, or merely routine jostling ("bouncing") of a baby. Sometimes the confessors speak poor English.

4. Childrens' hospitals, which rely on child abuse funding, seem to allege SBS more often and more quickly than other hospitals.

Fresno Bee (California) December 3, 2004, Friday, B1

Madrigal guilty in death of daughter

Charles McCarthy THE FRESNO BEE

A Madera County jury found Hugo Madrigal guilty Thursday of assault resulting in the death of his infant daughter, Mariah.

With one day of deliberation after a trial that included testimony about baby shaking and police coercion of confessions, jurors rejected charges of second-degree murder and involuntary manslaughter against Madrigal.

Madera County District Attorney Ernest LiCalsi said after the verdict that Madrigal could get a maximum sentence of 25 years to life in prison. The maximum for second-degree murder is 15 years to life. Sentencing is set for Dec. 30.

"I'm just glad that my baby's finally got justice," Mariah's mother, Marcella Salinas, 23, said outside the courtroom. "I hurt for his [Madrigal's] family."

Madrigal, then 25, was arrested in May 2001 after doctors at Children's Hospital Central California took Mariah off life support. The child would have been 4-months-old and two days when she was pronounced dead.

Detectives said that Madrigal told them that he shook the baby for about 10 minutes because she was crying. Madrigal had been baby-sitting the morning of May 12, 2001, when paramedics were called to the northeast Madera apartment that Madrigal shared with Salinas.

In his closing argument Wednesday, Madrigal's lawyer, Eric H. Schweitzer of Fresno, reviewed testimony of Richard Ofshe, a sociologist from the University of California at Berkeley. Ofshe testified that police manipulate suspects to get confessions.

Another expert witness for the defense, John Plunkett, a Minnesota-based forensic pathologist, insisted that blunt force injuries, not shaking, caused Mariah's death.

Shaken baby syndrome is an unscientific theory; it's rational to conclude that the child died from injuries suffered a few days earlier in an accidental fall from her car-carrier to a parking lot pavement, Schweitzer argued.

Madera County Deputy District Attorney D. Jones contended that Madrigal shook Mariah because she wouldn't stop crying.

The reporter can be reached at cmccarthy@fresnobee.com or (559) 675-6804.

The Business of Design

by Bill Breen

In an economy where style is king, we all need to start thinking and acting more like design.

From: Issue 93| April 2005 | Page 68 By: Bill Breen Photographs by: Derek Shapton

Quick, what's your IQ? No, not your intelligence quotient -- your imagination quotient. In this turbulent, get-real economy, the advantage goes to those who can outimagine and outcreate their competitors. So says Roger Martin, who has devoted his professional life to the study of competition -- first as a director at Monitor Co., the Boston-based consultancy, and now as dean of the University of Toronto's Rotman School of Business.

Martin believes that the North American economy is radically transforming. As the production of goods and services increasingly becomes routinized, the cost advantages across a growing array of industries accrue to China and India. Scale alone is not enough to thrive in a world where markets are rapidly globalizing; incremental improvement won't deliver a decent ROI. Our companies will continue to prosper only if they push to the higher ground of innovating and creating "elegant, refined products and services" -- which might well be produced elsewhere.

The upshot, says Martin, is nothing less than the emergence of the design economy -- the successor to the information economy, and, before it, the service and manufacturing economies. And that shift, he argues, has profound implications for every business leader and manager among us: "Businesspeople don't just need to understand designers better -- they need to become designers."

In a global economy, elegant design is becoming a critical competitive advantage. Trouble is, most business folks don't think like designers.

In a recent interview in Toronto, Martin asserted that real value creation now comes from using the designer's foremost competitive weapon, his imagination, to peer into a mystery -- a problem that we recognize but don't understand -- and to devise a rough solution that explains it. "For any company that chooses to innovate, the foremost challenge is this," Martin says. "Are you willing to step back and ask, 'What's the problem we're trying to solve?' Well, that's what designers do: They take on a mystery, some abstract challenge, and they try to create a solution."

The trouble is, when confronted with a mystery, most linear business types resort to what they know best: They crunch the numbers, analyze, and ultimately redefine the problem "so it isn't a mystery anymore; it's something they've done 12 times before," Martin says. Most don't avail themselves of the designer's tools -- they don't think like designers -- and so they are ill-prepared for an economy where the winners are determined by design.

And that, Martin claims, means traditional organizations must reinvent themselves to perform more like design shops. In this new world, there are fewer fixed, permanent assignments. Instead, work flows from project to project, and people organize their lives around their projects, just as in a design shop. Accenture, for example, is more efficient in part because it's a project-based organization -- it doesn't staff up for things that aren't projects, and it doesn't allow projects to become permanent.

Design-influenced companies also understand their customers at a profound level and mobilize around that insight. The Four Seasons Hotels and Resorts' detailed study of customers led it to conclude that it could win by offering first-class service, and so it invested enormously in recruitment and training. The chain visualized the desired outcome -- "make people feel great" -- and reinvented itself to deliver an exceptional "user" experience.

Organizations that embrace a design-based strategy also employ the practice of rapid prototyping. Whereas conventional companies won't bring a product to market until it's "just right," the design shop is unafraid to move when the product is unfinished but "good enough." Designers learn by doing: They identify weaknesses and make midflight corrections along the way.

Design's powerful impact on business strategy will require a whole new way of thinking. Martin asserts that traditional companies "reward two types of logic: inductive (proving that something actually operates) and deductive (proving that something must be)." Designers combine inductive and deductive reasoning to create a fresh approach -- abductive thinking -- which Martin defines as "suggesting that something may be and reaching out to explore it." Instead of acting on what's certain, designers bet on what's probable. Companies such as Apple act like design shops by saying, "If everything must be proven, we'll never make the likes of an iPod."

Martin believes that business schools are also out of position for the emerging design-based economy. In his view, even the degree -- a master's of business administration -- is problematic. "We're telling students that the big bucks are made by administering linear improvements -- getting better and better at doing essentially the same thing," he says. "But the real challenge lies in getting better and better at a different thing: devising clever solutions to wickedly difficult problems."

That view has led Martin and a handful of other pioneers to lead a groundbreaking effort to redesign business education itself. In a first step, Rotman has allied with the Ontario College of Art & Design to launch a series of joint courses. The Illinois Institute of Technology's Institute of Design recently launched a nine-month-long executive master's degree program in design methods. And Stanford University has committed $35 million to launch its "d.school," where people from large companies and startups alike will come to learn design thinking. "We want to produce T-shaped thinkers," says David Kelley, the chairman of Ideo and founder of the d.school. "That means combining analytical thinking -- the vertical leg of the T -- with horizontal thinking: intuitive, experimental, and empathetic."

And that's only the beginning. Rotman, the Institute of Design, and the d.school are in the early stages of mapping out a new discipline, "business design," which will seek to yoke business schools' rigor, practicality, and business relevance with design schools' creative problem solving and intensive understanding of the customer. The goal is to create a new generation of design- and business-based talent factories that will help fuel the North American economy as it undergoes its next great transformation. nFC

Bill Breen is Fast Company's senior projects editor. He is based in Boston.

http://pf.fastcompany.com/magazine/93/design.html

Copyright © 2004 Gruner + Jahr USA Publishing. All rights reserved. Fast Company, 375 Lexington Avenue.,New York , NY 10017

 

 

 

Survivors More Common in America

by Ralph R. Reiland

In "Die in Britain, survive in U.S.," the cover article of the February 2005 issue of The Spectator, a British magazine, James Bartholomew details the downside of Britain's universal health care system.

Among women with breast cancer, for example, there's a 46 percent chance of dying from it in Britain, versus a 25 percent chance in the United States. "Britain has one of worst survival rates in the advanced world," writes Bartholomew, "and America has the best."

If you're a man diagnosed with prostate cancer, you have a 57 percent chance of it killing you in Britain. In the United States, the chance of dying drops to 19 percent. Again, reports Bartholomew, "Britain is at the bottom of the class and America is at the top."

Explains Bartolomew: "That is why those who are rich enough often go to America, leaving behind even private British health care." The reason isn't that we sue more in America and scare doctors into efficiency, or that our medical schools are better. It's more simple than that. "In America, you are more likely to be treated," writes Bartholomew, "and going back a stage further, you are more likely to get the diagnostic tests which lead to better treatment."

More specifically, three-quarters of Americans who've had a heart attack are given beta-blocker drugs, compared to fewer than a third in Britain. Similarly, American patients are more likely than British patients to have a heart condition diagnosed with an angiogram, more likely to have an artery widened with angioplasty, and more likely to get back on their feet by way of a bypass.

On the availability of equipment, explains Bartholomew, Britain has only half as many CT scanners per million people as the United States, and half as many MRI scanners. With lithotripsy units for treating kidney stones, the United States has more than seven times the availability per million of population than Britain.

Not only is the British equipment in short supply, but much of what's there should be loaded up and carted off to the nearest scrap dump. An audit by the World Health Organization, for instance, found that over half of Britain's X-ray machines were past their recommended safe time limit, and more than half the machines in anesthesiology required replacing. "Even the majority of operating tables were over 20 years old -- double their life span," reports Bartholomew.

Taken as a whole, Britain's universal health care system has evolved into a ramshackle structure where tests are underperformed, equipment is undersupplied, operations are underdone, and medical personnel are overworked, underpaid and overly tied down in red tape. In other words, your chances of coming out of the American medical system alive are dramatically better than in Britain.

"Having a diagnosis test beyond an X-ray in Britain tends to be regarded as a rare, extravagant event, only done in cases of obvious, if not desperate, need," writes Bartholomew. "In Britain, 36 percent of patients have to wait more than four months for non-emergency surgery. In the U.S., 5 percent do. In Britain, 40 percent of cancer patients do not see a cancer specialist."

On how things worked in an individual case, Bartholomew writes of Peggy, an American radiologist, who went to Britain to meet her English boyfriend's family. While she was there, her boyfriend's father found blood in his urine and went to a local National Health Service hospital in which no CT scans or cystoscopy tests were done. The patient had asthma and laid in his hospital bed with breathing difficulties but still didn't see a specialist. He was told it would take six weeks. Short of the six weeks, he was discharged from the hospital. Back home, before his appointment with a consultant came up, he died of an asthma attack.

As a footnote on Canada, the average wait for a simple MRI is three months. In Manitoba, the median wait for neurosurgery is 15.2 months. For chemotherapy in Saskatchewan, patients can expect to be in line for 10 weeks. At last report, 10,000 breast cancer patients who waited an average of two months for post-operation radiation treatments have filed a class action lawsuit against Quebec's hospitals.

None of the above is meant to say that America's health care system isn't a mess. That's just a different story, with a different set of fatal flaws.

http://www.pittsburghlive.com/x/tribune_review/opinion/columnists/reiland/s_307614.html

copyright © 2004 by The Tribune-Review Publishing Co.


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