Overall Healthcare Spending Only Slated to Rise 7.5%

---Anna Shepherd, Health & Personal Finance Professional - Cambria Health Advisory Professionals


The following is an interesting press release of a recent research effort by the Health Research Institute of Price Waterhouse Cooper. It predicts 2013 healthcare spending based on recent trends and finds interestingly enough that overall spending is only slated to rise 7.5%. (Still above the posted rate for inflation, but not as bad as some had predicted.)  http://www.marketwatch.com/story/historically-low-growth-in-healthcare-spending-expected-in-2013-projects-pwc-health-research-institute-2012-05-31

The reasons for this slowed growth are quite heartening for the cause of business like Cambria Health Advisory Professionals, which holds as its mission the right of the individual to make his own health care decisions.  PWC’s article cites that in recent years, employers and industry professionals have made sincere efforts to reduce their own cost burdens; examples include such strategies as employees shouldering more of their medical costs, blockbuster drugs coming off patent, cost transparency, and employee participation in employer-sponsored wellness programs. Combined, this means that lowered costs could potentially be sustainable.

We continue to experience upward cost pressures stemming from the need for increased hiring and more sophisticated technology. With the baby-boom generation seeking retirement and getting ever-older, the healthcare industry is going to necessarily experience continued growth in costs due to greater utilization; the key will be assuring that resources are properly allocated (“not wasted”) to avoid negative impacts on the overall economy.

Certainly, Americans are demonstrating their interest in taking control over these decisions. For example, average enrollment in high deductible plans coupled with a Health Reimbursement Account has increased to 43.2 percent in 2012 from 34.2 percent in 2010.

The information showcased in this article represents, in my opinion, a great success for the free-market and individual decision-making. It legitimates a RAND study from the 1980’s that I frequently reference; the study demonstrated that people consume less health care when forced to pay higher co-pays. Numerous studies involving health savings accounts have corroborated what economists have always known: the more insulated people are from having to pay for something, the more of that thing they are willing to consume.

It seems to follow simple logic: if something is coming out of your pocket, you tend to pay attention. Obvious, right?

But allow me to make 2 additional points that this article brings to mind.

1. All of this progress can be undone if the Affordable Care Act is upheld as Constitutional. In our discussions on this blog, we try not to be too political in our commentary, but the fact remains that this piece of legislation is likely to fundamentally transform a sector of the economy that accounts for 17% of GDP. As employers unload employees onto government plans (which appears probable if recent polling is to be believed), the efficiency that we’ve seen when patients are accountable is likely to be erased. This was, and continues to be, my biggest objection to the legislation.
2. On a lighter note, if recent cost-controls keep pace, we’re on a better road. I believe that in addition to having consumption tied to the patient’s own wallet, the patient needs to be knowledgeable about their options and treatment courses. This will allow them to make more effective decisions, not simply financial ones. Instead of foregoing their yearly check-up just to save money, they may decide to forego an expensive drug and consider a generic instead. These types of informed trade-offs will add up for the industry as a whole as well as the individual patient.

The key may be helping the market find ways to create and attract more informed consumers who make more rational purchasing and health care usage decisions.

Can Solving Health Care Be As Simple as Just Doing What We’re Told?

----Terri Bernacchi, PharmD, MBA, Cambria Health Advisory Professionals

I don’t really think it’s this simple, of course, but since New York Mayor Bloomberg believes in the soundness of his recent decision to outlaw large soft drinks within the walls of his kingdom for the benefit of those (like me) without prudence or self-control, I thought it would be interesting to at least pose the question. Patient compliance with medications is frequently only around 50%; this is a well-documented fact. And the reasons for the non-compliance or non-adherence are as varied as the subjects of the study.


Do we forfeit our liberty to be willful and uncooperative (either by drinking Big Gulps or not getting our prescriptions filled) when others must contribute to the actual costs of our own health care? 
 
The article linked to this discussion recognizes the truth that people often don’t get their prescriptions filled. http://articles.sun-sentinel.com/2012-04-08/health/fl-hk-skipping-medicines-20120406_1_drug-costs-cvs-caremark-drugs-for-chronic-conditions  

There are a number of reasons that people do this---and it’s not just because they are obstinate rascals. They don’t get the prescription filled because a) they know it won’t work, b) don’t like the side effects c) don’t want to spend the money, d) they don’t have the money (different than option c), e) they already have a whole stock of that drug at home in the medicine cabinet that they didn’t take last time either, f) they don’t believe that the drug was necessary because their problem is going to resolve quickly and g) other reasons.

However, the system costs of medication non-compliance are well documented. The non-compliant patient is more likely to have costly medical complications. In addition to the obvious higher costs, there are some additional questions that this story raises:  

1. Buried in the story is this sentence: “Employers and insurers have grown so concerned about the costs of drug skipping that the credit-rating service FICO now offers a service to estimate the likelihood an employee or patient will take medicine correctly.” I think about whether I would want someone to rate my compliance in the same manner as my credit score. That seems a bit too “judgmental” and invasive. I wonder what others think about that. Here’s a link to that offering: http://www.fico.com/en/Products/Scoring/Pages/FICO-Medication-Adherence-Score.aspx
2. I wonder how the effects of “electronic-prescribing” “ERX” will change the dynamic of physicians sending a prescription which the patient will never have filled. If the doctor KNOWS that the patient does not get the prescription filled, will it change the patient’s behavior? How will the doctor react when he/she finds out the patient never picked it up or rejected it? One of the benefits of ERX in the professional literature is the fact that if it is electronically sent, it is much more likely to be dispensed. According to Surescripts, “Research shows that 20% of prescriptions never even make it to the pharmacy. A study conducted by Walgreens and Surescripts showed that once a practice starts e-prescribing, 11 percent more of their prescriptions get dispensed.” http://www.surescripts.com/about-e-prescribing/benefits-of-e-prescribing_for-pharmacies.aspx  
3. The FDA is looking (again) at designating some drugs as a third category, potentially available without a prescription. How will such a new category be impacted by this compliance concern/trend? What will their health coverage be? See well-written analysis here: http://www.fdalawblog.net/fda_law_blog_hyman_phelps/2012/02/on-again-off-again-third-category-of-drugs-is-on-again-at-fda-simultaneous-rx-and-otc-marketing-also.html  

Of course, I am just scribbling my thoughts and opinions on this matter in a blog posting. The questions are provocative and the answers are not necessarily clear-----it is my hope that we don’t let the discussion go by the wayside. The way in which we attack the problem of therapy compliance may have unintended consequences in terms of our freedoms and on care quality. We need to embark on the next steps with eyes wide open.

Terri is the founder of Cambria Health Advisory Professionals. Among her current clients: a large health sciences firm serving payers, pharmaceutical and device manufacturers and other stakeholders, a small special needs health plan as a 5 Star Consultant, and several other health related clients. The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Health Advisory Professional colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years experience as founder and primary servant of a health technology company which was sold to her current employer three years ago. She has both a BS and a PharmD in Pharmacy and an MBA.

A Perspective on Waste in Healthcare: A Tale of Two Articles

---------By Anna Shepherd, Health and Personal Finance Professional

Two recent headlines tell a tale of two stories but offer me an opportunity to comment on a couple of interesting challenges we face in our health care system, across the country.

1. The first article lauds a $1.1 million federal grant awarded to a Berkeley clinic as part of the Affordable Care Act (http://www.mercurynews.com/breaking-news/ci_20713200/berkeley-clinic-lands-1-million-grant-educate-abouthttp://www.bellinghamherald.com/2012/05/23/2535431/feds-struggle-with-getting-elderly.html)  The funds were from a pool of $122 million in Health Care Innovation Awards given out recently to 26 recipients. The "Over 60 Health Clinic" of LifeLong Medical Care will hire 60 new employees as part of the grant. The goal? Educate patients and reduce costs associated with urgent care, while improving outcomes through the use of “Peer Educators”.
2. The second article (by Kaiser Health News) details the disappointing results of another federally funded program started in 2007: “Money Follows The Person” which anticipated saving significant Medicaid and assistance dollars, by moving elderly people out of nursing homes and back into community.  See (http://www.bellinghamherald.com/2012/05/23/2535431/feds-struggle-with-getting-elderly.html) 

The Berkeley clinic article seems to be an appropriate start to patient-based cost control. It cites that educating 750,000 patients about compliance and the nature of their disease could save the system $250 million. The cost of the program itself: $122 million. My immediate concerns have to do with the information available in the article and the nature of the problem itself.

This article doesn’t go into depth about what type of backgrounds the peer-educators have, which to me is really what the whole program hinges on. If these people are former clinicians, nurses, or medical psychologists, I could foresee a high success rate (though costly).  

However, if they are case workers, which is likely, I could see an outcome similar to the second article about the Money Follows the Person program; it has been promised $4 billion, received $1 billion, and performed it’s duties for 36% fewer people than promised.  

In California alone, the health agency responsible for implementation has to work with two dozen other local placement agencies and is finding the barriers significant. This is the type of waste endemic in trying to fix problems whose origins are misunderstood or even unattainable.  

I want to explore why these types of programs are ineffective. Is it just government bureaucracy run amok? Is the populace in question more at-risk than average, leading to skewed results? Are the advocates being employed the ones best-suited to help?  

The fact that much of the US population needs advice concerning their health is not in question; but who is providing it certainly is. Suggesting that former healthcare professionals need to be central to patient counseling is not intended to demean the role of social workers; they are a necessary resource to many who have limited options and means. However, I think that the people advising patients on issues of compliance and decision-making need to be steeped in the industry; someone who’s seen and treated it all can be an invaluable advocate.  

However, let it be clear that they must also be entirely uninvolved when it

comes to diagnosing or treating the patient once they turn the page on being a provider and become an advisor. Current payment schemes’ create inherent conflicts of interest for the provider and are certainly a contributor to waste and fraud. In my opinion, patients would also be much likelier to heed the words of an impartial professional, leading to increased success rates.

In regards to efficacy and cost of the counseling, the biggest obstacle remains patient involvement. Those who have self-selected to be involved in the Berkeley clinic have a higher likelihood of success and will make the program worthwhile (again, given appropriate counsel).  

The point of this whole website and subsequent venture (see Cambria Health Advisory Professionals at http://www.sharedhealthdecisions.com/ ) is about empowerment of the individual and illness prevention for patients within the private sector. In speaking with outsiders, I have been criticized for not understanding the plight of a poor or disabled patient and the needs they have when they are sick and on their own.  

I respond by saying that I do understand because I work personally with elderly patients on Medicaid. But empathy is not an effective solution, nor is more money or programs.  

What we believe is effective is to catch the individual well before they have entered the Medicare system. If someone is frequenting a health advisor in their 40’s, they can learn about all of their options before the hard decisions must be made and, more importantly, they can plan. Removing these proactive patients from the pool of those in need not only saves vast sums of money but also allows focus to be directed on the patients with a high likelihood of noncompliance or medical neediness, creating a win-win for all.

For Fear of Being “Difficult”, Will I Forego My Needs?

----Terri Bernacchi, PharmD, MBA, Cambria Health Advisory Professionals
A study by the Palo Alto (Calif.) Medical Foundation Research Institute published by Health Affairs this May describes what many of the “meek” already know. You don’t want to irritate your doctor with too many off-putting questions; you’d rather suck it up and trust that he/she will do the right thing. http://newsroom.pamf.org/2012/05/patients-fear-being-labeled-difficult/

Though not a random, large scale trial, the researchers confirmed something many of us who have taken care of patients already know: There is often something broken in the dialogue between physician and patient as it relates to “give and take”.  The patient often withholds information, lies, or deliberately remains quiet when the golden opportunity to ask questions, challenge, or probe for options comes up.  Think how hard it is to ask for a second opinion! 

 In December 2009, PAMF researchers interviewed 48 people broken into six distinct focus groups. The participants were randomly selected from the electronic health records of five primary-care physicians in the San Francisco area.  Maybe not suprisingly, most were white, well-educated and more than 50 years old, and 19 reported annual incomes of $100,000 or more, although the investigators believe the results apply across all demographics.


And I would tend to agree with them from my own anectdotal experience.
The researchers found that focus group participants feared to question a physician’s advice or recommendations, concerned that they would be perceived as a challenge to the doctor’s authority. Most of them wanted to avoid “displeasing” or “disappointing” their physician.

Patient-Doctor Relationships represent a fundamental imbalance in power;  some felt that their physicians perpetuated this authoritarian stereotype. To manage their care, then, many described “doing their own research about treatment options and bringing social support to medical consultations to make the best use of the limited time available.”

“Shared decision-making is a collaborative process that allows patients and their healthcare providers to make health care treatment decisions together, taking into account the best scientific evidence available, as well as the patient’s values and preferences”: This requires two way exchange of information and implies accountability on both parties to actually be direct with regard to needs, wants and concerns.

It may mean that we should start early (perhaps in grade school) to encourage more effective means to encourage two-way dialogue with health care providers so that the charade of what is actually going on with a patient does not involve the patient withholding important factors or feelings (embarrassment, shame, unworthiness) that could impact care.

Terri is the founder of Cambria Health Advisory Professionals. Among her current clients: a large health sciences firm serving payers, pharmaceutical and device manufacturers and other stakeholders. a small special needs health plan as a 5 Star Consultant, and several other health related clients. The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Health Advisory Professional colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years experience as founder and primary servant of a health technology company which was sold to her current employer three years ago. She has both a BS and a PharmD in Pharmacy and an MBA.