2012 Potpourri IX

By March 9, 2012 Commentary

AARP has put out another of its annual reports on price changes in drugs used frequently by seniors.  While previous reports focused on nominal manufacturer price changes, this one details retail price changes, although some will still complain that the methodology doesn’t adequately reflect generic versus brand name use, for example.  It is undisputed, based on other research, that manufacturers are raising the prices, and retail pharmacies are in turn raising prices, of both generic and brand name drugs at a good clip.  In 2009, according to this report, the average annual retail price increase for 514 widely used brand and generic drugs was 4.8%.  This was a significant step-up from the increases in 2005, 2006 and 2007, but similar to the one last year.  Interestingly, brand drugs increased 8.3% in price, specialty 8.9% but generics actually decreased by about 7.8%.  The overall price increases likely resulted in both greater out-of-pocket spending for beneficiaries and higher costs and premiums for payers.   (AARP Report)

Shared decision-making is a hard concept to argue with, even if it may be difficult to implement with many patients who are not capable of understanding and analyzing often complex health information.  But many doctors still don’t apparently even give patients a chance to be involved in their care.  A study reported in the Journal of General Internal Medicine finds that prostate cancer patients and coronary stent recipients don’t always get information about alternatives and have full discussions about their preferences.  For prostate cancer patients, 64% said they were given at least one alternative to surgery and about the same number said the cons as well as the pros of an alternative were discussed.  About 76% were asked about their preferences.  For stent recipients, however, only 16% were asked about preferences and only 19% got any discussion of the cons.   (JGIM Article)

Deloitte surveyed physicians to get their reactions to use of health information technology.  About 300 doctors responded to an online survey.  Almost two-thirds use some kind of electronic record to manage clinical information.   Most feel that such technology is valuable in managing care and improving quality, but about 64% said that using the technology had not improved diagnostic accuracy or appropriateness of treatment plans and almost half were concerned that using such technology to communicate or share information with patients could lead to more liability.  And doctors remain very concerned about the cost of implementing and maintaining such systems and the burden they place on daily work routines.  Doctors find regulatory issues, like meaningful use, very confusing and difficult to deal with.   (Deloitte Brief)

Here is a shocker, the administration has surreptitiously raised the projected cost of the health reform law by $111 billion, but unfortunately for them, people noticed and now it is getting some attention.  Now tell us again about how this law will reduce spending.  Everything so far has shown that it is going to raise spending and not by a small amount.  The CLASS provisions had to be abandoned, insurance premiums have gone up instead of down, the high risk pools are costing over twice what was projected and now the subsidies are going to cost a lot more than projected.  The administration tries to claim this is offset by reduced Medicaid spending, but that is a misleading lie, to be kind of polite about it.  The states are drowning under Medicaid and the expansion will throw them an iron lifesaver.   (Hill Story)

A report from the Health Care Incentives Improvement Institute finds that for the common procedure of knee replacement there is wide variation in costs that if reduced could create significant savings.  Some of the variation is related to complications which reflect poor quality and some to differences in unit prices charged.  Using a form of value-based purchasing as well as evidence-based pathways, the authors believe spending could be reduced by 5-10%, with quality improved.  Readmissions and other complications account for spending above the 60th percentile on a case.  Bundling payments for the entire episode of care would provide incentives to obtain better quality.  Reducing unit prices above the median cost would help as well. (HCI Report)

Research published in the Annals of Internal Medicine examined primary care physicians’ ability to understand and make accurate recommendations about screening tests.  The gold standard for the benefit of a screening test is that it shows reduced mortality in a randomized trial.  The physicians were presented with two scenarios, one with increased detection and survival and one with decreased mortality.  The first is irrelevant evidence about the benefit of a hypothetical test; the second is relevant.  The physicians were more likely to recommend the irrelevant than the relevant test, by a 3 to 1 margin.  The physicians also displayed little understanding of statistics.  If physicians can’t accurately understand and communicate these things, how can we expect patients to?    (Annals Article)

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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