The Health Care Blog

POLICY: Health costs and the road to Armageddon

Since I wrote about the Center for Practical Health Reform and their intention to head off a perceived collapse in private sector health insurance at the pass, a little more attention has been focused on the whole issue. How bad is the current cost crisis and how long can the rest of the economy go on pushing money into it?  The press is flowing in two flavors. First, we can't afford the costs. Second, we're going to pay more for more cool technology.

Here's the word from the Detroit insurers that fund their health care programs by selling cars on the side (sorry for stealing Uwe's line): 

Health care costs are moving front and center as the single biggest factor impacting corporate profits and U.S. companies' inability to compete globally......Health expenditures rose from $1.3 trillion in 2000 to $1.7 trillion in 2003. The health sector consumed 15.3 percent of the nation's gross domestic product in 2003, up from 13.3 percent in just three years. Industry observers say the problem is bigger even than in the 1980s, before managed care came on the scene and curbed increases for a little more than a decade before costs started spiraling again.

Those who pay for health care -- businesses, government and individuals -- are becoming more vocal about the need to bring costs in line. But that's about where the agreement begins and ends.

Some rather astute observers of the system think that it can't take much more of this. My old boss Ian Morrison and his colleagues at Harris have been suggesting that the 2008 election is about the time when this issue will get national attention.  THCB regular The Industry Veteran seems to agree:

I've said it for a long time; at a certain point the top 500 (non-Pharma) corporations will no longer be able to pass along the exorbitant health care costs and at that point, they will pose the biggest threat to Big Pharma. It may not come now because, as this article makes plain, some of the big companies are pursuing diversions such as pay-for-performance, evidence-based medicine and so forth. I give it until about 2008 for the big companies to recognize that IT and efforts to rationalize providers wonÂ’t adequately control costs. At that point, if our old buddy John Dingell is still around, he may emerge as a co-grandfather of a national health care system.

The folks at the Center for Practical Health Reform want to get the whole of the industry together to get past their differences, essentially so that the health care industry as a whole can keep manufacturing an affordable product for their customers. The problem is that the pace of the technology change that is the major reason for driving these costs up is not slowing, it's speeding up. Just this weekend here's one article about new scanning technologies, and another about defibrillators. Clearly there are incentives to do too many scans, and clearly there are going to be even more incentives to put defibrillators in even more people now that it's been approved for virtually anyone with any heart condition (such as a pulse). So the system will produce more services connected to those devices. (And perhaps these scans and devices will save other costs down the road--but that's a separate argument we don't yet want to have).

But the point is that as these costs get added onto the system, government will more or less keep paying just as it always has over the last 30 years. Although employers are starting to eject themselves from the system, enough of them will keep paying that disaster will not immediately strike. In no event will there be a huge flow of money out of the system. Why do I have some confidence in saying this?

Health care costs are highly related to recessions, and the relative difference in health costs to overall GDP growth causes alot of fuss. And it does have a big impact. In the early 1970s we had Nixon's plan for universal care and price controls (My, how have those Republicans changed!). In the early 1980s we had DRGs for Medicare inpatient care, and in the 1990s we had managed care. Each of those was a reaction to the high level of health care costs coming out of a recession as this chart shows.

NEWS/BLOGGING: FierceHealthcare is back

After a one month hiatus, the daily digest newsletter FierceHealthcare is back. There were lots of nice things said about it during its absence and it's going to be slightly refocusing on the processes building the 21st century health care system. And if I say so myself it's pretty good--OK I'm the editor so I'm biased! But the price is unbeatable. If you don't already get it, you can sign up here.

PHARMA: FDA stonewalls FOIA requests. by Blunter

Veteran FDA observer Blunter is back with more accusations about the FDA's unwillingness to let the public know what it knows.

When I last blogged about the utter incompetence and disarray in the FDA establishment, I emphasized the "transparency" and "culture"” there. If any further proof is needed, look at the Public Citizen FOIA complaint for information on parecoxib. (Copy of the complaint is with the FDAWebView article, 1/25) (Ed's Note: It isn't available elsewhere on the web but I have seen a copy of it). Here we have the HHS Secretary Nominee saying the White House is looking at new candidates for the FDA Commissioner post, with the issue of Vioxx and similar drugs raising the question of "what did you know and when did you know it," amid the spectacle of supposed protectors of our health groping for their hindsides and unable to find it with both hands.

You will recall, I stated in my previous post:

For sure, more funding which would be effectively applied will be needed but unlikely to do much good so long as the current management and culture is allowed to continue.

Presently, outsiders who want or need information on FDA decisions, and the like, are channeled through a Freedom of Information process which takes two years or more just to get around to the request, and then some more time and redactions to get the info out, if indeed any is released. It has been long-standing, recognized management incompetence, worse in the Center for Drug Regulation than anywhere else (probably in the whole government). There is no transparency in what FDA is acting on, or ability for any one to compare in real time other similar data, by scientists or others, who may have data of their own or seek to learn from the existing records FDA has passed upon. And when it comes to other than medical and scientific data, the likelihood of getting anything at all to look at several years down the road is even more remote.

And there has been no effort in the last near decade to do anything about it, like introduce management or data submission processes to make the system workable. Human clinical data and drug experience (appropriately clad to protect patient privacy) is a public resource, not a trade secret, for example. But you’d never know it at FDA.

Last October, the Health Research Group of Public Citizen sought out relevant materials which FDA used to deny approvability of a COX-2 like drug, parecoxib (sold under the brand name Dynastat in Europe). A safe assumption is that Sidney Wolfe wasn't seeking to compete with Pfizer and was seeking to initiate a public risk/benefit debate.

Not only did FDA fail to grant access to the data in its possession, redacted or not, but has not yet responded to the request at all. This is the old "stonewall" response--not "yes", not "no"--typical of FDA. May be the data that lead to the turndown of parecoxib would have substantiated the position of Whistleblower Graham on Vioxx, et al.

The vision is of the FDA topside huddled together, planning their next move for their own agenda---the world and naysayers be damned.

Need we have further proof of the bankruptcy the policies and abilities of those presently holding FDA positions of control. Let’s wish Sid Wolfe swift success in the courtroom.

Meanwhile, the studies from Express Scripts which showed that most patients on COX-2s should not have been, were borne out by this study.

HEALTH PLANS: Kaiser will combine "systemness" with high-deductible plans, maybe.

There's a pretty interesting interview with Kaiser Permanente CEO George Halvorson in the San Francisco Business Times. The tag line is that "Moving Kaiser beyond one-size-fits-all health coverage and 'Dark Ages' record-keeping, CEO George Halvorson reshapes a health-care giant for the 21st century". Well, maybe.

Kaiser appears--at the third time of trying--to be making a real go with its HealthConnect electronic medical records system. My spies in S. Cal tell me that the implementation is going really well. However, given that the original system I was shown (based on the old Oceania system) was pretty spiffy back in 1997, I'm not certain that the whole organization needed to wait until 2005-6 to get it right. But no matter, they are clearly ahead of the rest of American mainstream health care in EMR adoption. And they are making the folks at Epic much richer. Plus, it goes without saying that Kaiser has got the integration of incentives and purpose that the rest of the system lacks in dealing with the long term chronically ill. If I was chronically ill, I'd like to be a Kaiser member.

However, Halvorson's other concern is one that doesn't really have an answer. He worries that younger healthier people in his catchment area will be attracted to high-deductible plans and HSAs--not an area that Kaiser as a full service HMO has much experience with.

Kaiser is scrambling to move into this new realm by creating benefits packages with added cost-sharing elements, such as high-deductible plans and HSAs, he said. Hiring experts in insurance systems and billing has been a big priority recently. It is also hiring large numbers of new managers and workers with experience in areas such as actuarial work, insurance underwriting and the like.

Kaiser is trying to roll out these types of plans, but of course they don't fit easily with its historic pre-paid group practice mentality. It also doesn't fit in with the mathematics of insurance. High-deductible plans work well for an organization that doesn't have to deal with the consequences of splitting the risk pool. Kaiser is a risk pool. It's been the pioneer of community  rating forever.

The article suggests that the high-deductible plans are so far a minor irrelevant part of Kaiser's business. If they stay that way, it's probably OK. If they become a big deal, well all the actuaries in the world won't make their chronically ill population healthier, and that could lead to real problems.

POLICY: 60 Companies Plan to Sponsor Health Coverage for Uninsured

I'm beyond baffled by this NY Times report: 60 Companies Plan to Sponsor Health Coverage for Uninsured. I'm taking 2 aspirin and will comment in the morning.

INDUSTRY: The Birmingham kid is innocent!

As the trial begins of Healthsouth CEO Richard Scrushy for the largest outright health care fraud ever, it's good to know that in America you can start a huge company from nothing, be totally responsible for all its success, pay yourself vast amounts of money--enough not only to buy all the cars, houses and planes you need but also to sponsor Christian rock boy bands and hire in actors from The Wonder Years as PR Monkeys--and go through seemingly dozens of CFOs. And all the while you never need to have any idea at all about the financial state of your own company.

QUALITY: Pawelski's out of line in accusing the NCI by Oren Grad

Oren Grad, a physicians and an independent consultant whose work focuses on policy and strategy in the health sciences, didn't think much of what Greg Pawelski said yesterday on THCB about cancer research being aimed at the wrong things. Nor did he much appreciate the way that he said it. Again, I'm no expert in these issues and, although I have some sympathy with the position that we do too much at the margin in oncology that promotes the profit of the oncologists rather than of the patients, I understand that this is a very, very delicate area. Greg has good reasons for holding his positions, but here's Oren's explanation of why he's wrong.

I have to say that Greg Pawelski's post today on cancer research was annoying. I think he's out of line in both tone and substance, and his "expose" is in fact pretty stale by now.

It's not as if the leadership of NCI aren't very well aware of the issues Greg raises, as well as many more that he doesn't. The CTWG initiative described in these links is but one of several being pushed vigorously by NCI director Andrew von Eschenbach. A lot of very smart, very busy people both within and outside NCI are currently chewing up substantial time figuring out how to adjust NCI's approach to meet today's challenges rather than yesterday's.

From a scientific perspective as well, the implication that Greg's found magic answers that are being scandalously overlooked is way off base. Both metastasis and ways of individualizing treatment are very much on people's minds, and will, appropriately, see increased research effort in coming years. Only time will tell whether the insights brought by these efforts will in fact pan out in improved patient outcomes. Cancer is fundamentally a very hard problem.

It's certainly difficult to redirect a large public agency like NCI quickly. But as a long-time observer of cancer research policy and bureaucratic politics, I do think that as the current initiatives play out we can expect to see changes that will help NCI respond more effectively to new scientific findings and opportunities.

POLICY: Florida solves Medicaid cost problem (well, not really)

As you'd expect from the most efficient, transparent, clean-government minded state in the nation, Florida has figured out how to solve its Medicaid cost problem. It's planning on privatizing Medicaid and making recipients buy in with a voucher into managed care plans. I said plenty about Medicaid in a post last week, so I won't repeat it all. But three things struck me. First, according to the leader of Florida's Democrats, the Medicaid budget is about to overtake the education budget. I know they have lots of old and poor people down there, but can that really be true? (I'd like to understand this explanatory page but unless I'm pretty dumb it contradicts itself in the notes below the table). In California where we rival Mississippi in propping up the table on per capita education spending, health spending is only a third of education spending. So is Florida really spending no money on educating its kids? The California state budget division is below, and it shows that we spend a lot less on health than on education.

(From California Budget Basics, by Stephen Levy).

Secondly, 70% of Medicaid dollars in most states go on the care of the poor, elderly and disabled, mostly on nursing home care. No managed care organization has a clue how to deal with those folks, so really we are talking about saving money (potentially) by going after only the other 30% of the dollars. Not really much likelihood of big savings there.

Finally, states are the FILOs of budget deficits (first in, last out). But if you believe the Bush rhetoric about how the economy is getting better (and assuming you are a governor named Bush you should do), shouldn't this picture be getting better? And if it is, why does it need radical surgery now?

If you want to dive a little deeper into Medicaid, you might take a look at this McKinsey report on what's wrong with Medicaid which gives some ideas for fixing it. While it's not dumb as far as it goes, the report doesn't unfortunately mention the actual ways Medicaid really needs to get fixed which are:
a) rolling it into a universal health insurance system,
b) creating a national long term care policy, and
c) doing something about the scandalous state of the poor in America.

Jonathan Cohn summed it up well in an email in which he said that:

What I love is the constant dismay at the way Medicaid keeps eating up larger shares of state budgets, as if it didn't have something to do with the fact that more and more people are becoming eligible as employer-sponsored insurance withers away.

QUALITY: Now cancer is top killer, let's attack it using common sense, by Greg Pawelski

Greg Pawelski has posted frequently on THCB about cancer care. On the occasion of cancer becoming the nation's biggest killer for those under 85, he appeals for sensible use of scientific funding to go after the process behind metastasis.

The Associated Press reported that Cancer is the Top Killer for Those Under 85. There has been no real progress in the treatment of most common forms of cancer. Recent NCI data showed that U.S. cancer mortality rates have increased and age-adjusted cancer mortality rates in response to treatment have not improved in several decades, despite the introduction of many new drugs. There is a mind-set of cancer culture that pushes tens of thousands of physicians and scientists toward the goal of finding the tiniest improvements in treatment rather than genuine breakthroughs, that rewards academic achievement and publication over all else.

The January 10, 2002 issue of the New England Journal of Medicine noted that 20 years of clinical trials yielded survival improvement of only 2 months for patients with advanced lung cancer. It also pointed out that oncologists at a single institution may obtain a 40-50% response rate (not cure) in a tightly controlled study, but when these same studies are administered in a real world setting, the response rates (not cure rates) decline to only 17-27%.

In the March 15, 2004 issue of the Journal of Clinical Oncology, an editorial stated that a review of all the large, prospective, randomized trials published comparing the newer taxane-based regimens, none of these regimens have increased either complete response rates or overall survival, with median survivals remaining at two years or less. This is precisely the same results which were being obtained 30 years ago.

The results of nearly 30 years of clinical investigation in the treatment of patients with cancer, neither standard or high-dose regimens had done a great deal to improve the outcome of patients. For over the past 20 years, they relentlessly combined chemical agents in various regimens with ever-increasing dose intensity and the survival for patients is exactly the same, less than two years. Not a hint of significantly improved survival.

In the March 22, 2004 issue of Fortune, an extensive expose of why there has been no progress in drug treatment of cancer in three decades, the author writes that it is not localized tumors that kill people with cancer, it is the process of metastasis, 90% of the time. Aggressive cells spreading to the bones, liver, lungs, brain or other vital areas, that are wreaking havoc. You'd think cancer researchers would be bearing down on the intricate mechanisms of invasion and spread? However, according to a Fortune examination of NCI grants going back to 1972, less than 0.5% of study proposals focused primarily on metastasis, trying to understand its role in cancer or just the process itself. Of nearly 8,900 NCI grant proposals awarded in 2003, 92% didn't even mention the word metastasis.

So pharmaceutical companies don't concentrate on solving the problem of metastasis (the thing that really kills people); they focus on devising drugs that shrink tumors (the thing that doesn't). There is a national problem in the way we treat the problem. It is time to set aside empiric "one-size-fits-all" treatment of cancer for "individualized" treatment based on testing the individual properties of each patient's cancer.

POLICY: The VA is showing the way to better chronic care

The Washington Monthly has an excellent article on care quality in the VA health system. It's well worth reading. There's also an excellent analysis of that article by John Rodat at Health Signals New York.

I won't say too much more other than all the studies about how well the VA is doing with DM have all been read here by diligent THCB readers, and the idea about throwing the VA open to everyone was postulated by Dave Moskowitz on these pages a few months back. I don't know whether Phillip Longman, the new article's author, is merely thinking the same great thoughts -- but if not, well Dave, theft is the most sincere form of flattery!

My only add would be that I had a an excellent nurse practitioner, Susan Johnston from the VA facility in Temple, Texas, on my panel at the disease management for diabetes conference last week. Sue leads the telemedicine program in the VA in central Texas and using a system from Health Hero Network she has achieved remarkable results in improving the health outcomes of patients with diabetes on her program. It's clear that the VA is leading the way in the use of telemedicine for the care of the sickest diabetics, and it's also clear that she and her colleagues are as dedicated and as clinically excellent as any in the nation. And any significant improvement in care whether here or elsewhere in the world needs both dedicated and talented people and new systems of care.  As the IOM reported in Crossing the Chasm we can't keep pushing our people to do more and do better without changing the system of care in which they work.

UPDATE: The ever wonderful Jane Sarasohn Kahn points THCB to a study from RAND put out last December that shows that 12 VA regions bested their surrounding community practitioners on chronic care, preventative care and disease management--and in fact any care that required a tracking process.

TECHNOLOGY/CONSUMERS: Body-Scanning Clinics didn't make it

Amazingly enough even the American public eventually couldn't produce enough marks interested in generating a false positive using cash out of their own pocket to keep the body-scanning clinic business in operation. It was apparent from some consumer data IFTF had in 2003 that these centers were running out of new patients, and their chances for repeat business were slim. Americans in general don't like paying out their own pocket for health care services which feel like ones their insurer should be covering, and this kind of high-end preventative service will have a limited appeal even amongst those for whom $1,000 means little financially, once people figure out that their doctor regards it as a pain rather than a good idea. What I found most interesting was the business destination of one of the doctors in at the start of the trend:

As for Dr. Giannulli, he has moved on to other things. He founded a company, CareTools Inc., which sells software for medical record keeping to doctors' offices. That, he says, is the new frontier in medicine.

I assume he's looking for a quick score there, too. Good luck, mate!

QUALITY: Diabetes and the modern disease management girl

So I spent the last couple of days at a disease management conference that focused on diabetes care.

There is general agreement that -- at least 15 years since everyone has understood the problem -- the health care system suffers from a lack of transparency, information systems, rational incentives, and care quality. Diabetes care is a microcosm of that. Type II Diabetes is a disease that's primarily caused by years of poor living and poor care (obesity and metabolic syndrome being typical precursors). Once people get it less than 50% of them are correctly diagnosed, and after that the care of diabetics tends to be poor. Only around half get all the recommended tests and care that they need. And yet for a long time (since the DCCT trial back in the early 1990s) it's been well known that regular monitoring of blood glucose levels can reduce the risks of further damage from diabetes. And those risks are nasty and expensive--blindness, limb amputations and heart disease. Getting diabetics to do all the things that they should do to reduce their dependence on glucose, and control their insulin levels is a great application of the education, monitoring and bullying that is modern disease management.

Disease management really started out as a front for drug company marketing so that they could pretend that they could work with PBMs and wrap services around their pills that would improve patient care. Of course they were also taken by the concept that disease management programs tend to suggest that sick people should take more drugs than they currently do. Of course some of those drugs might be generics....

But when you get beyond the high meaning rhetoric, disease management is complicated and confusing. Within the population with diabetes there are levels of illness, not to mention co-morbidities. Within disease management there are different ways of getting to patients (such as occasional mailers, phone calls, and constant monitoring via telemedicine). Once you get into the management of diabetics (or any other disease management program) it gets more complicated depending on who you are. Integrated systems want to control the costs of their sickest members; health plans typically want to sell value added services to their customers; and employers (and government) want to try to prevent the costs with their disease. But we live in a world where most diabetes disease management is developed for the less sick diabetic patient in a commercial population, while the greatest need -- and potentially greatest savings -- may be for a much sicker diabetic on Medicare or Medicaid.

But at a practical level, that all means that there is no clear focus on which patients to pursue. Should health plans be looking at their healthy commercial populations, or should they be ignoring them and going after the really sick people in their plans --who may be on their way into Medicare within a few years and give them no return? In the commercial world disease management services for diabetics cost something like $3 pmpm. Intervention using a telemedicine system (like the Health Buddy) can be around $50 pmpm. Obviously you need some pretty immediate savings if you are spending that much, and the VA at least seems to have decided that it is getting a return. But then again, Florida Medicaid in a rather biting criticism of Pfizer Health Solutions last year, felt that the returns from phone-based DM weren't so great. But overall I came away from the conference no clearer on where on the financial graph the lines of the cost of intervention versus the value of the benefit intersect. And I'm not sure that anyone else really knew either.

What was interesting is how little was known about what the real ROI of different interventions on different types of people. One plan sent out postcards even though they believed them to be ineffectual because a drug company sponsored them. I mentioned to the people next to me that DM had gone full circle and was back to being drugcompany marketing. Even the phone calls may or may not be effective depending on their frequency and what was communicated in the call.

There's an initiative in Tennessee, run by the Center for Evidence-Based Medicine at Vanderbilt in which the Blues are paying primary care docs to act as educational coaches for diabetics. This seems to be working (although it's early days) and is having some good results, as are the folks at the VA with their nurse practitioner-led interventions and monitoring. But overall this is an industry that really doesn't have its story straight as to what works consistently, and what's worth paying for.

And of course while most payers don't know if they can look forward to reaping the benefits of a costly intervention down the line, selling DM services will remain problematic. That's why the Medicare CCIP demonstration projects about to take place are so important. The Medicare population is ground zero for DM especially for diabetics. Let's hope that the CCIP experience tells us what DM can hope to achieve, and give us a level playing field on which to judge the value of the various interventions.

PHARMA: Viagra apparently good for your heart

And in today's cheap shot Viagra post...

Apparently the main ingredient in Viagra is showing potential for reducing the chance of some heart diseases. In mice it's been shown to "reverse the growth associated with heart failure, a chronic heart condition caused by infections, high blood pressure and other heart diseases." I assume that it works by the blood causing the growth of the heart being diverted elsewhere....

PHARMA: NY Times reports on the apparent demise of Merck

The NY Times has an article which essentially forecasts the demise of Merck. Other bloggers here at THCB, over at Business Word and at In The Pipeline have all written various versions of the same story but none of us have been quite as upset as the NY Times about the impact on the economics of flower shops in New Jersey.

POLICY: Are we heading for a crash and can we turn the wheel?

I've been at a conference on disease management for diabetes where there was an interesting talk from Brian Klepper at the Center for Practical Health Reform. I don't know much about the Center, (here's a PDF) but it's positioning itself as a neutral forum for reform based on the principles that Arnie Milstein's been espousing -- using process technology to reduce health care costs.

Klepper is a pessimist and an optimist. He believes that the sky is falling and quickly. He notes that the acceleration of employers dropping coverage (67 to 63% from 1999 to 2002) is speeding up. He also had another chart showing that only 45% of employees got their coverage from their employer anymore. Plus as cost sharing of premiums is heading up as less is being offered, cost per unit of benefit is increasing. The result is that even in employer coverage, people are being priced out of the market. The impact on providers is that bad debts are rising very fast.

He reasonably thinks that Medicaid is heading to block grants, and that Medicare is heading to defined contribution. So no more money from the government. Meanwhile as private health care funding is half of all income for the system, a 5% of fall in private coverage leads to a 2.5% contraction in actual revenue. This is what's causing a spike up 10% nationally in hospital bad debt (in a surge of people showing up at EDs who don't have the means to their deductibles or co-pays). This is showing up first in safety net institutions, such as Grady hospital in Atlanta which last year said that they will no longer admit indigent patients. A few years back community hospitals were at 12% margins--now most are losing money or making 1-2%. But they're building like crazy and may not be able to service the debts they're incurring. Meanwhile half of all bankruptcies are caused by medical bills and 1 in 7 families have problems paying their bills. And worse, 2/3 of those have insurance.

In other words there is going to be a net outflow of money from the system leading to a collapse. That's where I think Klepper's overly pessimistic. I think that the economy can keep pumping money into health care for a decade or two before we get anywhere near that point.

He says that the health care has refused to do what it takes to limit costs. I'd agree there. Where he's an optimist is that Klepper thinks that this is the tipping point that will push all the players in the system to sit down and agree a way that will lead to their survival.

But given what he believes, Brian has 3 questions

1. What changes must we make to overcome these problems?
2. How do we overcome the special interest gridlock?
3. How do we avoid working on the wrong things? (e.g. working on the uninsured rather than the underlying costs that cause uninsurance--although again I think this is the wrong way around).

Brian believes that the only common ground is to get people to act for survival for the sake of their own self-interest. So the crisis has to be very, very visible. He thinks it will be and that all players (including suppliers, physicians and employers) will look for a neutral ground to solve the problem.

How is CPHR going to solve this?
They have 3 major principles
1) Retool American Healthcare enterprise with standardized management tools, such as
--compatible IT platforms
--transparency in performance accountability
--evidence-based medicine
--evidence-based management
--pre-market national technology assessment
--changes in reimbursement to move to P4P
--process changes throughout system

2) Establish a national floor of basic coverage that everyone will get

3) Fix health care liability (but that must include quality and error prevention)

5 phases to the CPHR plan
a) Show that the system is unsustainable
b) Establish a neutral coalition platform
c) Outreach and mobilization
d) Develop content and consensus on action
e) Coordinate the content through policy adjustment

Brian believes that they've achieved 1 and 2. I'm by no means sure, but the effort is worth watching and supporting, faute de mieux.

After this talk there was an interesting conversation among the audience about how long the system can sustain now. I think it can go on for a long while in this mess, but in the room 3-5 years seems to be the consensus. Brian thinks that he can get changes made within that time by setting the right folks up in a political environment where they'll overcome their opposition. That's why I think he's an optimist. I don't see any initiatives on Capitol Hill that will address any of these problems quickly. Perhaps the CPHR might create some.

POLICY: Of confirmations, inaugurations, obfuscations, and Medicaid

In my less than glowing reviews of the Bush Administration as a whole I reserve a special place of opprobrium for Condi Rice. This is partly not really her fault. I turned up at Stanford in 1989 to do a one year masters in Poli Sci wanting to take a class on Soviet affairs (remember that?) and found that the Stanford professor who specialized in Soviet affairs had taken the year off. Yup, because Condi had decided to have fun somewhere else I had to get up early every Friday and take a rickety old bus to Berkeley to take a similar class there. So as well as being a completely incompetent National Security Adviser -- "I believe the title was 'Bin laden determined to attack in the US' but it was a historical document" -- she's also directly responsible for me having to wake up early, often hungover as Thursday was sorority girl drinking night, when I was a young grad student. Yesterday Condi was getting what passes for a reaming these days from a mostly compliant bunch of Dems (well done Kerry and Boxer for voting 'Nay') in the Senate as she advanced up to and beyond the level of her own incompetence to Secretary of State. Good grief.

Meanwhile, to end my political rant and return to healthcare, down the hall in the Senate a much more agreeable bunch was giving plaudits to the soon-to-be former governor of the nation's most conservative state as he takes over Tommy Thompson's job at HHS.

As in the last week hints have been emanating from the Rove White House about figuring out a way to cut Medicaid -- presumably because its recipients can't afford to buy seats at today's inaugural -- the conversation in the confirmation hearings somehow turned to block grants. Sates' rights-loving Republicans approve of block grants as they give states the ability to do what they like, and Leavitt did some of what he liked in Utah--basically using the Oregon formula of giving worse benefits to more people. Of course block grants also do something else, in that they theoretically stop states gaming the system to get more matching Federal dollars. New York has been the master at this forever and there are going to be some Medicaid cuts there soon anyway. (For much, much more on that see the excellent Health Signals New York).

Leavitt was at pains to deny that he's ever heard of such a thing.

Leavitt was asked repeatedly about block grants and avoided answering directly several times. When pressed hard, he finally replied, 'I know of no block grant proposal that would come to you.' But at other points in the hearing, he mentioned that he was not yet privy to all White House plans and on several occasions he differentiated between the core Medicaid population that states must cover by law, and other 'optional' groups that states can choose to incorporate.

Bush a few years ago proposed what was essentially a block grant system that would apply to the optional groups. That was controversial even among congressional Republicans, and many Republican state governors also oppose it.

Of course what's really fiction is that any cabinet secretary would be privy to any information at all about policy that might affect their area of authority. And you don't just have to look at the treatment of Paul O'Neill. In fact look no further than the words of Leavitt's predecessor, (and I assume for a few more minutes) current HHS secretary Tommy Thompson, who was also a Republican governor. Here's what Thompson said after he quit about the small matter of the biggest legislative change to Medicare in 20 years.

In response to a question after his resignation speech, Secretary of Health and Human Services Tommy G. Thompson said, "I would have liked to negotiate" or bargain with pharmaceutical companies over the price of prescription drugs.

Thompson also said this:

"Out here, in this department, you get an idea and you have to vet it with all the division heads and the 67,000 employees. ... then it goes over to the supergod in our society, and the supergod is. … the White House Office of Management and Budget. And they turn you down nine times out of 10, just to show you who the boss is. Then it goes to the young intelligentsia of the White House, who don't believe that anything original or good can come from a cabinet secretary. And if you do get by them, it goes to the president. And if the president does agree with it, it goes on to the Congress, and if Congress ever does pass it, it's time to retire."

So frankly I don't doubt that Leavitt is telling the truth, I just don't think that the Rove/Norquist Administration has yet told him what's he's selling. And it's clear that like a fresh young car salesman he gets no choice of the options he's offering the bemused customer standing in the dealer's lot. I'm sure he'll look forward to deferring to his manager.

It is though somewhat all of a moot point. Medicaid is a disaster. It has been continually forced to pick up all the expansion of coverage thrown at it from both the first Bush Administration (that's daddy, not the last 4 years), then Clinton's CHIP program, then the abandonment of health coverage from employers in the last recession. And increasingly it has had to do this on less money as states went into deficit big-time in 2001.

Don't forget that Medicaid is three and a half programs masquerading as one. It's pays for poor moms and kids, it pays for nursing home care for the spend-down elderly and disabled (and for their Part B premiums for Medicare), and it provides the DiSH payments to big inner city hospitals. And most of the money (about 70%) goes to the long term care for the elderly and disabled. There's not enough money in the system to fix it by moving people into different programs, and the whole thing ought to be wrapped into some kind of universal coverage program for the working poor.

But pigs will not be flying anytime soon, so Medicaid is all there is to prevent even more kids being thrown out of health insurance and even more destitute seniors being thrown, literally, out on the street. So for that reason, despite the terrible margins on the business associated with it, the maintenance of Medicaid is of interest to lots of players in the health care sector from nursing home operators, to safety-net providers, to pharma companies, to a sub-set of health plans. And to anyone concerned that we may not be treating our most vulnerable citizens very well.

Meanwhile, apparently some other chump who couldn't manage his way out of a paper bag is also getting a renewed contract for his job today. I need to get better at screwing up as it seems to be what Americans like to reward.

BLOG NOTES: Comments coming

After 18 months of fearing first no readers, then obscenities, then spam, comments will be turned on at TCHB soon. I've been persuaded to do this by my new blogmeister John Pluenneke. So when they appear, please comment away. However, if you are one of my contributors (or want to be one) and interested in writing a more substantial piece, please continue to email me directly.

I of course reserve the right to prune obscene or excessively derogatory comments, or to turn the whole thing off if it seems like a bad idea!

TECHNOLOGY: Road Map to a Digital System of Health Records

Otherwise known as Blackford Middleton wants to take your money!

The NY Times reports on the latest reports to Brailer about how to create inter-operability in the brave new world of health records. I'm somewhat hopeful but I'm not holding my breath.Partners in Boston lead by ex-Stanford and Medicalogic geek Blackford Middleton) has an updated version of its report that I featured in THCB late last year which basically says that if you implement a full EMR, you should end up spending less money because you'll do things right the first time, and prescribe cheaper drugs. Another Stanford Prof, Lauren Baker poo-poohs some of the Harvard group's assumptions about whether there are real savings.

Meanwhile, the Center for Information Technology Leadership (a think-tank a

I can't really comment yet because this is all coming out in Health Affairs tomorrow and though the NY Times is on their "see it early" list, THCB is not. But Lauren understands well that the health care system can take illusory savings and spend them many times over. And Blackford knows that his work is designed to be provocative, in that most of the savings are for drugs not dispensed that the average clinician isn't paying for now and therefore won't accrue any savings from when they stop prescribing them.

More on all this tomorrow, when hopefully I've had a chance to look at the articles. (I'll be on a plane so don't expect an early update).

Meanwhile all this depends on the typical American physician deciding to go for the EMR prize. And everyone's favorite medical blogger, Sydney at Medpundit, has decided to do just that. I really hope that she keeps writing about it, because its her experience (and that of docs like her rather than that of the Permanente or Partners' docs) that will determine the speed of this transformation.

PHARMA/POLICY: FDAWeb puts up whistleblower page

The online site FDAweb has put up a page for FDA employees who want to whistleblow on their agency. This follows the negative experience of David Graham among others who's story is told in the initial posting.

Reg required):

In an interview on the PBS news program Now, CDER deputy director of drug safety David Graham said recently he wouldn't recommend that anyone become a whistleblower. Yet blowing the whistle on management wrongdoing has a long, if not entirely happy, history in government service, and is protected by the Whistleblower Protection Act and by a special government office set up to enhance that status, the Office of Special Counsel. Thomas Devine head of the Government Accountability Project (GAP) which subsequently came to Graham’s aid, put it this way: "Good faith whistleblowers* represent the highest ideals of public service and the American tradition for individuals to challenge abuses of power. They live by the Code of Ethics for Government Service by 'put[ting] loyalty to the highest moral principles and to country above loyalty to persons, party or government department' … Even dissenters with the basest of motives can make positive contributions if their disclosures are accurate and significant. They provide the pluralisms of views and competitive diversity of information necessary for the checks and balances in a democracy."

This should be pretty interesting reading over the next little while--assuming that there are people left at the FDA other than Graham who are unhappy with the way things have been going there the last few years. Meanwhile in other FDA related news, the President and Chief Medical Advisor of the Consumers Union have an editorial in the LA Times criticizing the Administration for leaving the agency without a permanent leader. Finally, Lilly is fighting back against the claims in the BMJ over the holiday break that it withheld information from the FDA about the potential adverse effects of Prozac. However, even if Lilly is right in this case it didn't exactly promote the information widely -- it came out as part of a court case. Although if my memory serves me rightly the "church" of Scientology was pretty convinced at the time that Prozac caused suicides, long before the scandal with pediatric use of Paxil. Heaven help us if we're relying on them for our best medical information.

HOSPITALS/POLICY: King-Drew in context, part II

Late last year there was a five part series in the LA Times about the problems at King-Drew Medical Center, and in a blog piece I tried to put it in a little context. I promised then that I would say more later and with today being Dr. Martin Luther King's holiday, it seems like a good day to do that.

These group under three predominant areas. 1) the scale of inner-city poverty and its impact on health care. 2) The relationship between community and authority. 3) The management of a large scale health care systems in a world of electoral machines. Inner city poverty and its impact on health care. There isn't too much more to be said about the impact of inner city crime and violence on facilities like King-Drew, LA County, Cook County and others. But there are several factors that are less well known. One is that the ratio of physicians to population is much lower and of course the ratio of the uninsured (and for that matter undocumented) to the general population is much greater in neighborhoods served by this type of hospital. The added costs of serving this population are to some extent recognized by the subsidies within the Medicaid program called DiSH payments (DSH stands for disproportionate share hospitals). But in the end even those with good insurance in these areas (predominantly Medicare recipients) receive services and surgery at much lower rates than those in the wealthier suburbs. One well known study focused on the extent to which blacks receive , but a Dartmouth study in fact shows that it's . Of course the correlation between being in a poor area and being a minority is very close, particularly in inner cities. And it's also true that general health measures are much worse for people in those areas, with things like asthma rates in the Bronx and some parts of southern California being much worse than national averages, and even the by what's happening in the inner cities.

But it's not absolute. In fact if you look at minorities who are wealthier than average (or as wealthy as average whites), as Mike Magee did late last year in his Health Politics site, you find that it's not race but class and income that make the greatest difference in health status and outcomes:

Looking at the number of deaths per 100,000 person-years in adult men with incomes under $10,000 per year, blacks have 21 percent more deaths than whites. This difference declines to 4 percent for those with incomes from $15,000 to $25,000. But when you turn the numbers sideways, comparing whites with incomes below $10,000 with whites with incomes of $15,000 to $25,000 per year, the higher income group has 240 percent fewer deaths. A similar comparison among blacks shows 275 percent fewer deaths among those with higher incomes.

We also know that class and education has a huge bearing on health status, and greater relative levels of inequality have a big impact too. So you'd expect a greater differential in the US, than in a country with relatively greater income equality like Japan, and that's what you get. So the end result is that if most of the poorer people are crowded into one part of a state or metro area, there will be fewer facilities and personnel to care for them, yet they'll have worse health problems.

There's also the physical geographic extent of this ghetto-ization. For example the series in the LA Times on King-Drew compared the LA County-owned hospitals unfavorably with the public hospitals in the SF Bay Area, but my impression is that the poor areas of Los Angeles are much larger and much more obviously segregated from the Beverly Hills and Brentwoods than those in San Francisco area. This may be true to in say Chicago versus New York (but again I might be wrong). But my guess is that the pure mix of patients is poorer at King-Drew than in equivalent hospitals in other cities.

So while King-Drew obviously has serious, serious problems, by definition any medical center serving the areas of Watts and Compton is going to have to deal with things that are outside the range of the normal American hospital experience.

2) The relationship between community and authority. One of the major themes coming through in the LA Times series is the lack of the trust between the local activists in Watts (who represent "the need") and the LA County Board of Supervisors (who represent "the money"). Part of this is based on race. I remember the Harris Poll some months before the OJ verdict that showed that 65% of black Americans thought OJ was set up while something like 85% of whites thought he was guilty, which gave you a hint as to how things were going to go with a majority black jury. Los Angeles is the city of the Watts riot, the CIA's involvement (however peripheral) in the crack epidemic, the Rodney King beating and later riots and the Rampart cops scandal. There isn't exactly a lot of trust between the haves and the have-nots. Again I'm too much of a traditional sociologist to be convinced this is entirely race and culture-based. For example back in my home town of London I was told back in the 1980s that the conviction rate by a jury for burglary in the Crown Court in Knightsbridge was 75% while in the poor east End neighborhood of Shoreditch it was under 25%. The joke was that wealthy jurors in Knightsbridge were convinced that the burglar might be trying to steal their VCR, while in Shoreditch the jurors would expect to be able to buy that VCR cheap from the thief. All joking aside, there are examples all over the American west of small predominantly white communities that don't trust outsiders and authorities without going all the way and becoming the next Timothy McVeigh. So I'm not convinced that the conflict between the LA County and the people in Watts is just about race. But it certainly is between those who are out of power and those who control it. And of course if King-Drew were to go away, part of the raison d'etre of that struggle overall would go with it.

3) The management of a large scale health care systems in a world of electoral machines. Finally, whenever you have a huge public health system like that of New York or Los Angeles, you are going to inevitably have to deal with the politicization of running it. Just understanding the bureaucracy of hiring and firing in these huge government departments boggles the mind of those of us used to the private sector. The delivery of favors and appointments in returns for influence, votes, and union members' electoral work continues to be standard practice in most city governments in the US (and has its direct equivalent at a national level!). When so much of the budget flows into the health system, it is by its nature going to get politicized. That may be using the poverty of health system as a political pawn to blackmail the politicians to handing over more funds (Santa Clara Valley Medical Center's Bob Sillen is a master at this), or it may be simply having the hospital as a focus for wider community activism.

The key is that the hospital is very visible as an employer and as a community resource. Even if the hospital was taken away in return for fair and complete subsidies for other care or coverage, no one responsible is going to agree to that swop. Why not? Because you can't parade a cut in a subsidy or a tax credit on the news, but you can show a hospital ward that has to close. And the legitimate concern of everyone in Watts is not just how bad is King-Drew, but what would they replace it with? And the answer in today's America may be something much less.
- posted by matthew Permalink

Friday, January 14, 2005

PHARMA: The FDA can only be saved by new leadership, by Blunter

There's a new contributor today on THCB. Blunter worked at the FDA for many, many years and understands from the inside many of the problems with the agency that have been documented in many places, such as this Forbes article. He responded to my notion that the problem is simply the speed of the drug approval process and suggests that the issues go way deeper. What he says about the management of the agency, the culture of secrecy and the information obfuscation is well worth taking seriously:

You and those following the travails of the Food and Drug Administration (FDA) are on the wrong track if your views of the FDA problems are focused on the rate of drug approvals and postmarketing reports. When it is finally revealed that gutless FDA executives sold User Fees as a solution (politically naive) instead of addressing the real management and public policy issues, the crux of the present problem is clarified. There is nothing inherently wicked about user fees but the original and subsequent managers didn't press the other fundiing and management needs

Within a year of the first user fee enactment (about 12 years ago), FDA was meeting the new deadlines without hiring or training any new MD's. And a whole reserve of physicians receiving premium pay and scientists are secreted away in the FDA halls in "non-traditional" endeavors---mainly management---often beyond their expertise and capabilities. Examples abound where FDA top execs are ignorant of basic management responsibilities and skills in themselves and their subordinates, beginning at the Commissioner's Office.

Look at EPA, NASA, NHTSA (and its potential model NTSB) and compare basic budgets to that of FDA which regulates vastly more of the GDP. What regulatee would object to paying a few million dollars to get a statutory deadline and perhaps as little as an additional week or two of sales. Just divide $1 or $8 billion by 365 to see the daily return. And the user fee concept is spreading to devices, animal drugs, food, cosmetics.

FDA seeks an analysis and report by the National Academy of Science or other prestigious group as a CYA tactic. There are lots of similar reports lying around comatose from past misadventures. However, the tactic permits FDA and other Administration folks to say it is inappropriate to discuss specifics of the latest debacle(s) before receipt of the blue ribbon report. Hence, we have FDA on autopilot until the dust and fervor clears and a new executive crew gets in that can say that "it wasn't on our watch".

This present controversy and period may end up as little more than a footnoted historic anecdote in the next report of the next FDA crises a few years hence. The answer involves leadership with a new and skilled management team, to make the FDA a safe and effective environment for FDA scientists (among the best) to do their best work, create a transparency in the work FDA does, and cause the Congress to accept responsibility for funding a mission that has no peer in the Federal government. For sure, more funding which would be effectively applied will be needed but unlikely to do much good so long as the current management and culture is allowed to continue.

Presently, outsiders who want or need information on FDA decisions, and the like, are channeled through a Freedom of Information process which takes two years or more just to get around to the request, and then some more time and redactions to get the info out, if indeed any is released. It has been a long-standing, recognized management incompetence, worse in the Center for Drug Regulation than anywhere else (probably in the whole government). There is no transparency in what FDA is acting on, or ability for any one to compare in real time other similar data by scientists or others, who may have data of their own or seek to learn from the existing records FDA has passed upon. And when it comes to other than medical and scientific data, the likelihood of getting anything at all to look at several years down the road is even more remote.

And there has been no effort in the last near decade to do anything about it, like introduce management or data submission processes to make the system workable. Human clinical data and drug experience (appropriately clad to protect patient privacy) is a public resource, not a trade secret, for example. But you'd never know it at FDA.

Ironically, the FDA cannot be suspended on life support while a solution is devised or changes made. But there is hope. Under Jimmy Carter, the prevailing view was the Presidency had grown too complex and demanding for one person, and the talk was how to divide it. Then came along Ronald Reagan, The Bushes, and Clinton, and those discussions are footnotes on history. What can an effective and motivated leader do? A lot. Still don't believe that FDA's lack of leadership isnn't just an issue but the issue. Look at the Forbes Magazine story and survey (mentioned on one of your earlier blogs) and see that the need for leadership at FDA outranks the closest competitor by three times or more.

PHARMA/POLICY: FDAWeb puts up whistleblower page

The online site FDAweb has put up a page for FDA employees who want to whistleblow on their agency. This follows the negative experience of David Graham among others who's story is told in the initial posting (Reg required):

In an interview on the PBS news program Now, CDER deputy director of drug safety David Graham said recently he wouldn't recommend that anyone become a whistleblower. Yet blowing the whistle on management wrongdoing has a long, if not entirely happy, history in government service, and is protected by the Whistleblower Protection Act and by a special government office set up to enhance that status, the Office of Special Counsel. Thomas Devine head of the Government Accountability Project (GAP) which subsequently came to Graham’s aid, put it this way: "Good faith whistleblowers* represent the highest ideals of public service and the American tradition for individuals to challenge abuses of power. They live by the Code of Ethics for Government Service by 'put[ting] loyalty to the highest moral principles and to country above loyalty to persons, party or government department' … Even dissenters with the basest of motives can make positive contributions if their disclosures are accurate and significant. They provide the pluralisms of views and competitive diversity of information necessary for the checks and balances in a democracy."

This should be pretty interesting reading over the next little while--assuming that there are people left at the FDA other than Graham who are unhappy with the way things have been going there the last few years.

Meanwhile in other FDA related news, the President and Chief Medical Advisor of the Consumers Union have an editorial in the LA Times criticizing the Administration for leaving the agency without a permanent leader.

Finally, Lilly is fighting back against the claims in the BMJ over the holiday break that it withheld information from the FDA about the potential adverse effects of Prozac. However, even if Lilly is right in this case it didn't exactly promote the information widely -- it came out as part of a court case. Although if my memory serves me rightly the "church" of Scientology was pretty convinced at the time that Prozac caused suicides, long before the scandal with pediatric use of Paxil. Heaven help us if we're relying on them for our best medical information.

PHARMA/TERRORISM: Cox-2s as the solution to finish off Al-Qaeda

Andy Borowitz's daily Borowitz report is the funniest thing in my in-box. And never a truer word was said about the real capability of pharma DTC to change the world than today's report which I reprint below.

CIA ATTACKS AL-QAEDA WITH PRESCRIPTION DRUGS Secret Weapon in War on Terror

The Central Intelligence Agency has implemented a new plan to destroy the al-Qaeda terror network by convincing the terrorists to start taking hazardous prescription drugs, the agency confirmed today. Within the intelligence community, hopes are high that evildoers will begin taking the medications and will soon afterwards suffer from a broad range of serious side effects, including heart attacks and death.

According to one CIA source, agency analysts developed the prescription drug strategy after they viewed a video of al-Qaeda leader Osama bin Laden walking in mountainous terrain and noticed that he seemed to be experiencing "a certain degree of joint pain."

The source said that on Monday of this week the agency launched a multimillion-dollar marketing campaign aimed at terrorists and madmen around the world, urging them to start taking several recently discredited pharmaceuticals. In one commercial currently airing on the Arabic-language al-Jazeera network, an actor portraying a terrorist says, "I was in so much pain, I just didn’t feel like going on jihad anymore."

After praising a prescription arthritis medication, however, the same evildoer is seen jumping through an obstacle course at a terror training camp, saying, "Now I wake up every morning ready to kill the infidels!" According to the CIA source, prescription drugs may be the secret weapon that the spy agency has long been looking for to win the war on terror: "The bad guys may have Anthrax, but we have Vioxx."

Elsewhere, a Colorado man who said he was optimistic about the upcoming Iraqi elections later discovered that he had a four-inch nail lodged in his skull.

PHARMA: The Industry Veteran on the chances of rational moderation from Pharma

On Friday I commented on the proposal to withdraw liability from punitive damages from pharma products approved by the FDA, and (probably vainly) appealed to responsible people in pharma-land to take at least look this gift horse closely in the mouth. The Industry Veteran was not hopeful and ascribes my perspective of naivete to my place of nativity. He writes:

The perfidious Albion shows through your plaintive call for some responsible, intelligent action from Big Pharma. You wanly hope for the industry's Wise Men to tell their CEO peers that current policies will create a devastating backlash. The fact is, Matthew, in American industry there is no House of Lords or even a council of seasoned gentrymen to provide rational thinking and responsible, adult behavior. The fiduciary officers who run the Big Pharma companies each seek to compile a stash of +/- $100 million in a fairly short period of time and then get out while they're still young enough to enjoy these ill gotten gains. As a result, their thinking is focused entirely on the near term and contains not a whit of concern for the industry's long-term survival. Given that they're indifferent to the well being of their employees, customers and, for the most part, their shareholders, it is at best naive to hope that they would value something as nebulous as a legacy. Your call for the emergence of Pharma Wise Men is as much as cry of despair and an admission of spent thinking as the bedraggled Democrats who expect a more moderate George Bush to appear during the second term because he may want to establish a legacy.

A few months ago I had a similar conversation with an acquaintance who retired from Bristol-Myers Squibb. I expressed my view about the narrow, self-serving approaches of Pharma management.

"I said the same thing to Charlie Heimbold," he told me, referring to the previous chairman of BMS. "When I mentioned the $100 million figure, Charlie stopped dead in his tracks as we were walking down the hallway and said, 'Is that all they're looking to get? They ought to be fired for not being ambitious enough!'"

I responded by asking how much Heimbold took with him when he retired. "It was easily $500 million," said the confidant.

HOSPITALS/POLICY: King-Drew in context, part II, with Tuesday UPDATE

Late last year there was a five part series in the LA Times about the problems at King-Drew Medical Center, and in a blog piece I tried to put it in a little context. I promised then that I would say more later and with today being Dr. Martin Luther King's holiday, it seems like a good day to do that.

I said last month that I don't think that race per se is at the basis of the problem, whether it's issues between blacks and latinos (as has often been cited at King/Drew) or whites and minorities. It seems to me that an obsession with race seems to be missing some vital points about American society that are ending up reflected in things like the failure of King/Drew. These group under three predominant areas. 1) the scale of inner-city poverty and its impact on health care. 2) The relationship between community and authority. 3) The management of a large scale health care systems in a world of electoral machines.

1) Inner city poverty and its impact on health care. There isn't too much more to be said about the impact of inner city crime and violence on facilities like King-Drew, LA County, Cook County and others. But there are several factors that are less well known. One is that the ratio of physicians to population is much lower and of course the ratio of the uninsured (and for that matter undocumented) to the general population is much greater in neighborhoods served by this type of hospital. The added costs of serving this population are to some extent recognized by the subsidies within the Medicaid program called DiSH payments (DSH stands for disproportionate share hospitals). But in the end even those with good insurance in these areas (predominantly Medicare recipients) receive services and surgery at much lower rates than those in the wealthier suburbs. One well known study focused on the extent to which blacks receive far fewer surgeries than whites, but a Dartmouth study in fact shows that it's micro-geography that's destiny in this case. Of course the correlation between being in a poor area and being a minority is very close, particularly in inner cities. And it's also true that general health measures are much worse for people in those areas, with things like asthma rates in the Bronx and some parts of southern California being much worse than national averages, and even the infant mortality rate in the US overall being dragged down by what's happening in the inner cities.

But it's not absolute. In fact if you look at minorities who are wealthier than average (or as wealthy as average whites), as Mike Magee did late last year in his Health Politics site, you find that it's not race but class and income that make the greatest difference in health status and outcomes:

Looking at the number of deaths per 100,000 person-years in adult men with incomes under $10,000 per year, blacks have 21 percent more deaths than whites. This difference declines to 4 percent for those with incomes from $15,000 to $25,000. But when you turn the numbers sideways, comparing whites with incomes below $10,000 with whites with incomes of $15,000 to $25,000 per year, the higher income group has 240 percent fewer deaths. A similar comparison among blacks shows 275 percent fewer deaths among those with higher incomes.

We also know that class and education has a huge bearing on health status, and greater relative levels of inequality have a big impact too. So you'd expect a greater differential in the US, than in a country with relatively greater income equality like Japan, and that's what you get. So the end result is that if most of the poorer people are crowded into one part of a state or metro area, there will be fewer facilities and personnel to care for them, yet they'll have worse health problems.

There's also the physical geographic extent of this ghetto-ization. For example the series in the LA Times on King-Drew compared the LA County-owned hospitals unfavorably with the public hospitals in the SF Bay Area, but my impression is that the poor areas of Los Angeles are much larger and much more obviously segregated from the Beverly Hills and Brentwoods than those similar areas in the San Francisco area. This may be true too in, say, Chicago versus New York (but again my local knowledge is limited so I might be wrong). But my guess is that the mix of patients is poorer at King-Drew than in equivalent hospitals in many other cities.

So while King-Drew obviously has serious, serious problems, by definition any medical center serving the areas of Watts and Compton is going to have to deal with things that are outside the range of the normal American hospital experience.

2) The relationship between community and authority. One of the major themes coming through in the LA Times series is the lack of the trust between the local activists in Watts (who represent "the need") and the LA County Board of Supervisors (who represent "the money"). Part of this is based on race. I remember the Harris Poll some months before the OJ verdict that showed that 65% of black Americans thought OJ was set up while something like 61% of whites thought he was guilty, which gave you a hint as to how things were going to go with a majority black jury. Los Angeles is the city of the Watts riot, the CIA's involvement (however peripheral) in the crack epidemic, the Rodney King beating and later riots and the Rampart cops scandal. There isn't exactly a lot of trust between the haves and the have-nots. Again I'm too much of a traditional sociologist to be convinced this is entirely race and culture-based. For example back in my home town of London I was told by a barrister (trial lawyer) back in the 1980s that the conviction rate by a jury for burglary in the Crown Court in Knightsbridge was 75% while in the poor East End neighborhood of Shoreditch it was under 25%. The joke was that wealthy jurors in Knightsbridge were convinced that the burglar might be trying to steal their VCR, while in Shoreditch the jurors would expect to be able to buy that VCR cheap from the thief. All joking aside, there are examples all over the American west of small predominantly white communities that don't trust outsiders and authorities without going all the way and becoming the next Timothy McVeigh. So I'm not convinced that the conflict between the LA County and the people in Watts is just about race. But it certainly is between those who are out of power and those who control it. And of course if King-Drew were to go away, part of the raison d'etre of that struggle overall would go with it.

3) The management of a large scale health care systems in a world of electoral machines. Finally, whenever you have a huge public health system like that of New York or Los Angeles, you are going to inevitably have to deal with the politicization of running it. Just understanding the bureaucracy of hiring and firing in these huge government departments boggles the mind of those of us used to the private sector. The delivery of favors and appointments in returns for influence, votes, and union members' electoral work continues to be standard practice in most city governments in the US (and has its direct equivalent at a national level!). When so much of the budget flows into the health system, it is by its nature going to get politicized. That politicization may involve using the poverty of health system as a political pawn to blackmail the politicians to handing over more funds (Santa Clara Valley Medical Center's Bob Sillen is a master at this), or it may be simply having the hospital as a focus for wider community activism.

The key is that the hospital is very visible as an employer and as a community resource. Even if the hospital was taken away in return for fair and complete subsidies for other care or coverage, no one responsible for care for the poor in America today is going to agree to that swop. Why not? Because you can't parade a cut in a subsidy or a tax credit on the news, but you can show a hospital ward that has to close. And the legitimate concern of everyone in Watts is not just how bad is King-Drew, but what would they replace it with? And the answer in today's America may be something much less.

UPDATE: The LA Times reports Tuesday that the LA County Board of Supervisors are prepared to put the running of King-Drew in the hands of an independent board.

PHARMA: Quick blog trawl, with UPDATE

A quick trawl of the blogs this morning finds me catching up on an excellent article on the present and future of DTC from John Mack at the Pharma Marketing Blog, and discovering a new anti-pharma blog called Pharmopoly. Obviously take this with a pinch of salt but here is what the anti-globalization folks at Pharmopoly are saying, and note that drug companies are now moving squrely into their cross-hairs over patnets and reimportation as well as over thrid world imports:

Global Growth launched the Pharmopoly campaign in mid-2004 as a response to Big Pharma's concerted worldwide lobbying for protectionist laws benefiting their profits at the expense of the sick and the poor. Last year saw an unprecedented, Big Pharma financed, multi-million dollar political lobbying and advertising effort. The lobbying was aimed at influencing the outcome of the U.S. elections in the direction of Big Pharma's preferred candidates and creating a political climate favourable to their interests globally. That lobbying effort earned Big Pharma a huge legislative payback. High prices for drugs result from the ability of the pharmaceutical monopolies to manipulate patent laws, trade treaties and legislation in order to deter competition. Big Pharma also buys political influence with the specific aim of boosting tax-financed prescription payment subsidies on a gargantuan scale. Only the arms industry relies on taxpayers for its profits more than the pharmaceutical industry. In the developing world already high prices are further compounded by costly import tariffs and 'luxury' taxes on foreign manufactured pharmaceutical treatments.

So the sick in rich and poor nations alike face twin threats from revenue hungry governments and corporations seeking to exploit patient necessity - despite the dying having no choice but to obtain drugs at whatever price they can afford. The Pharmopoly campaign aims to expose the high costs to patients of protectionism, import tariffs and government granted patent monopolies.

The Pharmopoly campaign's three objectives are; firstly to promote the tariff-free trade of drugs in the developing world, secondly defend the parallel trading of pharmaceuticals in the rich industrialised nations. Thirdly, to lobby legislators for patient-friendly duration limits on government granted monopolies which will reduce the long-term costs of drugs for patients. We are campaigning for safe, free and fair trade in drugs worldwide.

UPDATE: Paul Staines from Pharmopoly writes: Thanks for referencing our Pharmopoly blog, but just one point; we’re not “anti-globalization folks”, we are pro-free trade, pro-free enterprise. We’re not against Pharma making a profit. We’re against the abuse of monopoly powers granted by patents and the political influence Pharma has over politicians, particularly in the United States. Big Pharma is arguably against free trade and for protectionism whilst deriving its profits increasingly from socialised medicine. Third world governments are also in our “cross-hairs” – for putting excessively high tariffs and luxury taxes on imported medicines. We’re in favour of free trade in pharmaceuticals across borders.

PHARMA: Herbert on the legal protection measure for big pharma

In a NY Times op-ed piece called A Gift for Drug Makers, Bob Herbert writes that:

Tucked like a gleaming diamond in proposed legislation to curb malpractice lawsuits is a provision that would give an unconscionable degree of protection to firms responsible for drugs or medical devices that turn out to be harmful. The provision would go beyond caps on certain damages. It would actually prohibit punitive damages in cases in which the drug or medical device had received Food and Drug Administration approval. We know the F.D.A. has failed time and again to ensure that unsafe drugs are kept off the market. To provide blanket legal protection against punitive damages in such cases is both unwarranted and dangerous.

In fact the former head legal counsel at FDA Daniel Troy already pushed this policy--changing years of precedent at the FDA--by making it take the drug-makers side in legal cases. As California Health line reported when he finally quit late last year:

During his tenure, Troy worked in support of Bush administration efforts to block liability lawsuits against medical device manufacturers and drug makers. Troy argued in legal briefs that only FDA has the authority to determine when and how pharmaceutical companies should issue product warnings and that state court decisions could undermine the agency's authority over product labels. FDA claimed in briefs that suits against FDA-approved products would "sabotage the agency's authority"; critics called the agency's position a "back-door approach to tort reform."

While no one who's been awake in the last 4 years can pretend to be surprised about how much the Bush administration is determined to gift the pharma industry, one suspects that someone in the corridors of power up and down the New Jersey turnpike must be having some doubts. As one of the few "moderates" clinging to the lonely position that pharma is indeed responsible for most of the good innovations in the health care system, and that a rational, reasonable and profitable pharma business is possible without the need to push for the current excesses on pricing and marketing misbehavior, I've been suggesting that in its own longer term interests pharma should look to compromise. If instead big pharma believes that it can make itself completely immune to the American legal system by simply getting what looks increasingly like a bought-and-paid-for FDA to sign off on its behavior, then the backlash that will be coming big pharma's way when its protectors at either end of Pennsylvania avenue get booted out will not be pretty. And at some point they will be booted out.

Even Wall Street is generally comfortable that one of the risks of investing in pharmas is that damages will have to be paid out if bad things happen. Investors in Merck know that there's a payment coming down the line for Vioxx and the stock reflects that. It's stretching credulity to believe that pharma really needs this protection when no one else in America gets it, and it may well be time for wiser heads in New Jersey to suggest to their brethren that they take their snouts out of the trough less they miss the farmer coming up behind them with the butcher's knife.

PHARMA: The FDA can only be saved by new leadership, by Blunter

There's a new contributor today on THCB. Blunter worked at the FDA for many, many years and understands from the inside many of the problems with the agency that have been documented in many places, such as this Forbes article. He responded to my notion that the problem is simply the speed of the drug approval process and suggests that the issues go way deeper. What he says about the management of the agency, the culture of secrecy and the information obfuscation is well worth taking seriously:

You and those following the travails of the Food and Drug Administration (FDA) are on the wrong track if your views of the FDA problems are focused on the rate of drug approvals and postmarketing reports. When it is finally revealed that gutless FDA executives sold User Fees as a solution (politically naive) instead of addressing the real management and public policy issues, the crux of the present problem is clarified. There is nothing inherently wicked about user fees but the original and subsequent managers didn't press the other fundiing and management needs

Within a year of the first user fee enactment (about 12 years ago), FDA was meeting the new deadlines without hiring or training any new MD's. And a whole reserve of physicians receiving premium pay and scientists are secreted away in the FDA halls in "non-traditional" endeavors---mainly management---often beyond their expertise and capabilities. Examples abound where FDA top execs are ignorant of basic management responsibilities and skills in themselves and their subordinates, beginning at the Commissioner's Office.

Look at EPA, NASA, NHTSA (and its potential model NTSB) and compare basic budgets to that of FDA which regulates vastly more of the GDP. What regulatee would object to paying a few million dollars to get a statutory deadline and perhaps as little as an additional week or two of sales. Just divide $1 or $8 billion by 365 to see the daily return. And the user fee concept is spreading to devices, animal drugs, food, cosmetics.

FDA seeks an analysis and report by the National Academy of Science or other prestigious group as a CYA tactic. There are lots of similar reports lying around comatose from past misadventures. However, the tactic permits FDA and other Administration folks to say it is inappropriate to discuss specifics of the latest debacle(s) before receipt of the blue ribbon report. Hence, we have FDA on autopilot until the dust and fervor clears and a new executive crew gets in that can say that "it wasn't on our watch".

This present controversy and period may end up as little more than a footnoted historic anecdote in the next report of the next FDA crises a few years hence. The answer involves leadership with a new and skilled management team, to make the FDA a safe and effective environment for FDA scientists (among the best) to do their best work, create a transparency in the work FDA does, and cause the Congress to accept responsibility for funding a mission that has no peer in the Federal government. For sure, more funding which would be effectively applied will be needed but unlikely to do much good so long as the current management and culture is allowed to continue.

Presently, outsiders who want or need information on FDA decisions, and the like, are channeled through a Freedom of Information process which takes two years or more just to get around to the request, and then some more time and redactions to get the info out, if indeed any is released. It has been a long-standing, recognized management incompetence, worse in the Center for Drug Regulation than anywhere else (probably in the whole government). There is no transparency in what FDA is acting on, or ability for any one to compare in real time other similar data by scientists or others, who may have data of their own or seek to learn from the existing records FDA has passed upon. And when it comes to other than medical and scientific data, the likelihood of getting anything at all to look at several years down the road is even more remote.

And there has been no effort in the last near decade to do anything about it, like introduce management or data submission processes to make the system workable. Human clinical data and drug experience (appropriately clad to protect patient privacy) is a public resource, not a trade secret, for example. But you'd never know it at FDA.

Ironically, the FDA cannot be suspended on life support while a solution is devised or changes made. But there is hope. Under Jimmy Carter, the prevailing view was the Presidency had grown too complex and demanding for one person, and the talk was how to divide it. Then came along Ronald Reagan, The Bushes, and Clinton, and those discussions are footnotes on history. What can an effective and motivated leader do? A lot. Still don't believe that FDA's lack of leadership isnn't just an issue but the issue. Look at the Forbes Magazine story and survey (mentioned on one of your earlier blogs) and see that the need for leadership at FDA outranks the closest competitor by three times or more.

TECHNOLOGY/CONSUMERS: iHealthBuzz--new site for community messaging

There's a relatively new site for patients called iHealthBuzz. It's in the mix with the social networking sites that I keep the odd tabs on, and looks to try to take the disease specific list-servs up a level, although obviously its got a long way to go before it takes over from WebMD or YahooHealth. Is there a need for yet another health discussion venue? Judge for yourself but here's founder Ellen's take:

Our goal is to provide an anonymous (email address optional),friendly, useful, free, and trusted environment for those who are in search of health advice, support, and discussion. We are also nonprofit so we don't try to sell anything at all. As we are a grassroots site that really has started out as a hobby for many of us who are interested in using the Internet to promote health. We created this site to help people. We want to make iHealthBuzz message boards better also. Any ideas will also help. We are here to provide a useful service.

Our goal: To build a busy virtual "cafe" or meeting place where people are connecting around health issues. We want them to share stories and help each other. We hope to create a buzz about health on the internet. Hence i-health-buzz as the name.