Are Big Rx Price Increases Actually Going Extinct?

--Terri Bernacchi, PharmD, MBA Most headlines these days (targeted at the Consumer) lament the egregious price hikes that some generic companies are taking that are passed along to the payer and the patient.  The stories cite the opportunistic, usurious price hikes taken on “old” products.  There is little mentioned in these stories of the problems with Medicaid/ Best Prices and some of the generic purchasing patterns that have fostered this environment.  (For example, see the link:     http://time.com/money/4551222/generic-drugs-more-expensive-than-brand-name/)  Then, when looking at the Trade Journals, you get a different picture when looking at Brand product price increases.   For example, in a FiercePharma article entitled, “Branded drug prices softening big time, distributors warn” by Eric Palmer on Oct 31, 2016, the author notes that “…drug distributors McKesson ($MCK) and Cardinal Health ($CAH) are sounding a warning for the industry: price hikes are slowing, price hikes are slowing. As a result, so are their earnings.”    For example, the article quotes Allergan’s CEO Brent Saunders reacting to the “growing hue and cry over prices with a promise to cap drug price increases as part of a “social contract” with patients, explaining the move in a full-page ad in The New York Times.”    He notes that “McKesson’s Hammergren said that it is too early to speculate about what will happen long-term or whether a change in administration in the White House will lead to ongoing pricing practices. Still, he said, the big price hikes of the near past look to be history.” It might be that the US health care system that grown accustomed to highly available and cheap generics and higher cost brands taking double digit price increases every year is undergoing fundamental change from within.  Perhaps the “go to market” cost of branded products and “price protection” terms in rebate and pricing agreements are also tamping down price increases after a product’s market entry.  (See the link to the article:   http://www.fiercepharma.com/manufacturing/branded-drug-prices-softening-big-time-distributors-warn)

Terri Bernacchi is the Founding Partner of SME Health Systems and Cambria Health Advisory Professionals.  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 of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA.  Contact Information:  Phone: 262-893-9049  Email:  terrib@healthadvisoryprofessionals.com

 

Shared Decision Making Requires Effort, Data, and a Proper Mindset

---Terri Bernacchi, PharmD, MBA,  Cambria Health Advisory Professionals, Senior Partner at Valiant Health, SME Systems

Patients (and their family members) frequently must make choices about treatment alternatives. In order to do this, they be able to weigh the benefits or risk of each option. The doctor may already hold a bias in terms of what needs to be done for a patient (surgery, medication, “watchful waiting”).  The doctor certainly holds the advantage in terms of his/her understanding of the disease, the options, and the power to enact a decision.  But often, the doctor is missing a vital piece of the puzzle: what the patient is really doing at home, what they want, what they fear, and what they can afford.  Without such insights, he or she cannot fully appreciate how the pain or disability is affecting the patient and family on a day-to-day basis. Nor does he understand how the disease is impacting a person’s spiritual and physical needs and wants.

If you believe that it is ultimately NOT the doctor’s decision, then you believe in “shared decision making” (SDM) and the patient’s choice in regard to what happens to him or her.  If there are any risks or ongoing pains involved in a treatment option, or if personal behaviors can make the outcome better or worse, it’s best that the patient appreciate them.

Shared decision making requires, above all, an open and honest communication between the patient, the family, and the doctor.  SDM requires EFFORT on the part of all parties; the doctors and nurses cannot do magic without the active involvement of the patient and family.  They need to be guided by DATA that (using the best information available at the time) assists them in calculating risks, rewards, and likelihoods of success for one option over another.  Last, SDM requires a fundamental shift in the patient’s and provider’s mindset.  If a patient expects that the doctor can simply make all the decisions and they can be passive in their own care, they will likely encounter the least favorable outcomes.

“Many Americans don't have enough information or education to make fully informed choices about healthy lifestyles, medical treatments or navigating the complex U.S. healthcare system. Poorly prepared patients can be overwhelmed by new information that follows a diagnosis. “When patients are in doctors' offices, they (might) hear 50% of what's being said and maybe their relative hears another 30%, but they walk away without 20%,” North Shore-LIJ's Vignola said.”  See:  Modern Healthcare Article,” Providers help patients address emotion, money, health literacy” by Melanie Evans.   http://www.modernhealthcare.com/article/20131210/INFO/312129978/channeling-choice-providers-help-patients-address-emotion-money
Clearly, the Institutes of Medicine and other governmental entities and academicians are starting to study the impact of SDM in health care.  More literature is coming out and the case for actively-involved patients is beginning to be better understood.  But it’s a long way till we arrive at the finish line.

Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals and a Managing Partner at Quo Magis partners.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Valiant Health 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 of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA. 

Using Technology to Help People with Personal Health Decisions

---Terri Bernacchi, PharmD, MBA,  Cambria Health Advisory Professionals, Senior Partner at Valiant Health, SME Systems

The internet has certainly brought to be the age of “information” which does not necessarily mean that people using the internet can make “informed decisions” about their medical care.  It simply pulls up TOO much content, some of which might be relevant to the individual and some of which may actually introduce confusion which could foster misadventures and wasted resources. 

The use of “Social Media” can help isolated patients feel connected to others with similar conditions or in similar predicaments, empowering them to make better medical decisions or provide their own ‘self-care’. Unfortunately, it can also introduce harm if people lack contextual insight to sift through facts versus fiction.

 

At this time, people have little direct access to most of their own health data, and may be handicapped with an inability to understand it, even if they had it.  Thus, futurists are clamoring to develop a platform that analyzes and integrates their information with other sources of data.  In the world they envision, patients will be more engaged and have access to their information via mobile applications, including access to their Electronic Health Records. 

When this happens, some of the way things are currently done and the balance of power in terms of decision making will shift, creating a very different health care interaction between patient and provider. 

In the future, for example, some envision that “we will see technology, artificial intelligence and predictive data analytics” incorporated as part of the decision-making process.  This disruptive “voice of the computer” may not be far off.  See the attached opinion piece.

http://searchhealthit.techtarget.com/opinion/Patient-interest-better-tech-will-lead-to-shared-decision-making

Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals and a Managing Partner at Quo Magis partners.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Valiant Health 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 of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA. 

 

Hospital Studies Blows Apparent Hole in Concept of Shared Decision Making Reducing Costs

---Terri Bernacchi, PharmD, MBA,  Cambria Health Advisory Professionals, Senior Partner at Valiant Health, Managing Partner at Quo Magis Partners

Answering an important question, “Does “SDM” (shared decision making) reduce cost?” was the focus of a study published by JAMA (see link below) that utilized a survey given to ~20,000 inpatients over 8 years at a single institution.  They concluded that while the classic SDM concept that engaging patients in their care can help control costs and reduce utilization, SDM can actually increase lengths of stay and inpatient spending.  Patients were asked to rank a preference for the statement, “I prefer to leave decisions about my care up to my doctor”.  Investigators drew inferences from this as to their interest in SDM and specifically reviewed an inpatient setting.  The survey data were linked with administrative data to find conclusive results.

They found that Length of Stay was longer (by 5%) and incurred cost was higher (by 6% or about $865) for people that were more inclined to want to be involved in their decision making process. One of the primary co-authors, Dr. David Melzer has been quoted by Modern Healthcare as attributing some of the lack of cost reduction to the fact that prospective payments in hospital environments already incentivize more careful resource use, and that SDM could actually increase costs. 

But not so fast here.  I think there may be a larger concern: conclusions about attitudes toward SDM using a generic question at the exact time a person is in an inpatient hospital setting is the exact wrong time to evaluate SDM.  The principles of SDM involve the patient as an equal in the process----much has been written in the literature about the power dynamic / power imbalance between doctor and patient.  This is the wrong time and the wrong way to measure its effectiveness. 

In the Modern Healthcare article (requires a subscription) Melzer goes on to muse that SDM should not be thought of within a framework of cost-control, which I agree with.  If the principles of SDM get misrepresented as one more way to ration resources or cut costs at the patient’s own expense, there will be no basis for trust (an essential ingredient in real SDM).  SDM will fail.  

(Link takes you to an abstract and not the full article:  http://archinte.jamanetwork.com/article.aspx?articleid=1691765 )

I wonder what a patient would think about whether or not their doctor would see any survey response that indicates they prefer NOT to leave decisions about their care to the Doctor.  In the inpatient setting, someone is making almost all decisions for you---from how much you can eat or drink to what tests are going to be done and when you can go home. 

The problem lies not with posing the question but with the way in which it was measured and the environment in which it was measured.  Better yet to have asked more nuanced questions BEFORE hospitalization ever occurs and gauge the avoidance of hospitalization and other procedures (and the associated cost savings) rather than the methodology of asking a patient at his /her most vulnerable time in the hospital. 

 Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals and a  Managing Partner at Quo Magis partners.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Valiant Health 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 of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA.Managing Partner at Quo Magis partners.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Valiant Health 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 of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA.