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#TUBiol5227: Biomarkers & Biotargets: Genetic Testing and Bioethics

Curator: Stephen J. Williams, Ph.D.

The advent of direct to consumer (DTC) genetic testing and the resultant rapid increase in its popularity as well as companies offering such services has created some urgent and unique bioethical challenges surrounding this niche in the marketplace. At first, most DTC companies like 23andMe and Ancestry.com offered non-clinical or non-FDA approved genetic testing as a way for consumers to draw casual inferences from their DNA sequence and existence of known genes that are linked to disease risk, or to get a glimpse of their familial background. However, many issues arose, including legal, privacy, medical, and bioethical issues. Below are some articles which will explain and discuss many of these problems associated with the DTC genetic testing market as well as some alternatives which may exist.

‘Direct-to-Consumer (DTC) Genetic Testing Market to hit USD 2.5 Bn by 2024’ by Global Market Insights

This post has the following link to the market analysis of the DTC market (https://www.gminsights.com/pressrelease/direct-to-consumer-dtc-genetic-testing-market). Below is the highlights of the report.

As you can see,this market segment appears to want to expand into the nutritional consulting business as well as targeted biomarkers for specific diseases.

Rising incidence of genetic disorders across the globe will augment the market growth

Increasing prevalence of genetic disorders will propel the demand for direct-to-consumer genetic testing and will augment industry growth over the projected timeline. Increasing cases of genetic diseases such as breast cancer, achondroplasia, colorectal cancer and other diseases have elevated the need for cost-effective and efficient genetic testing avenues in the healthcare market.
 

For instance, according to the World Cancer Research Fund (WCRF), in 2018, over 2 million new cases of cancer were diagnosed across the globe. Also, breast cancer is stated as the second most commonly occurring cancer. Availability of superior quality and advanced direct-to-consumer genetic testing has drastically reduced the mortality rates in people suffering from cancer by providing vigilant surveillance data even before the onset of the disease. Hence, the aforementioned factors will propel the direct-to-consumer genetic testing market overt the forecast timeline.
 

DTC Genetic Testing Market By Technology

Get more details on this report – Request Free Sample PDF
 

Nutrigenomic Testing will provide robust market growth

The nutrigenomic testing segment was valued over USD 220 million market value in 2019 and its market will witness a tremendous growth over 2020-2028. The growth of the market segment is attributed to increasing research activities related to nutritional aspects. Moreover, obesity is another major factor that will boost the demand for direct-to-consumer genetic testing market.
 

Nutrigenomics testing enables professionals to recommend nutritional guidance and personalized diet to obese people and help them to keep their weight under control while maintaining a healthy lifestyle. Hence, above mentioned factors are anticipated to augment the demand and adoption rate of direct-to-consumer genetic testing through 2028.
 

Browse key industry insights spread across 161 pages with 126 market data tables & 10 figures & charts from the report, “Direct-To-Consumer Genetic Testing Market Size By Test Type (Carrier Testing, Predictive Testing, Ancestry & Relationship Testing, Nutrigenomics Testing), By Distribution Channel (Online Platforms, Over-the-Counter), By Technology (Targeted Analysis, Single Nucleotide Polymorphism (SNP) Chips, Whole Genome Sequencing (WGS)), Industry Analysis Report, Regional Outlook, Application Potential, Price Trends, Competitive Market Share & Forecast, 2020 – 2028” in detail along with the table of contents:
https://www.gminsights.com/industry-analysis/direct-to-consumer-dtc-genetic-testing-market
 

Targeted analysis techniques will drive the market growth over the foreseeable future

Based on technology, the DTC genetic testing market is segmented into whole genome sequencing (WGS), targeted analysis, and single nucleotide polymorphism (SNP) chips. The targeted analysis market segment is projected to witness around 12% CAGR over the forecast period. The segmental growth is attributed to the recent advancements in genetic testing methods that has revolutionized the detection and characterization of genetic codes.
 

Targeted analysis is mainly utilized to determine any defects in genes that are responsible for a disorder or a disease. Also, growing demand for personalized medicine amongst the population suffering from genetic diseases will boost the demand for targeted analysis technology. As the technology is relatively cheaper, it is highly preferred method used in direct-to-consumer genetic testing procedures. These advantages of targeted analysis are expected to enhance the market growth over the foreseeable future.
 

Over-the-counter segment will experience a notable growth over the forecast period

The over-the-counter distribution channel is projected to witness around 11% CAGR through 2028. The segmental growth is attributed to the ease in purchasing a test kit for the consumers living in rural areas of developing countries. Consumers prefer over-the-counter distribution channel as they are directly examined by regulatory agencies making it safer to use, thereby driving the market growth over the forecast timeline.
 

Favorable regulations provide lucrative growth opportunities for direct-to-consumer genetic testing

Europe direct-to-consumer genetic testing market held around 26% share in 2019 and was valued at around USD 290 million. The regional growth is due to elevated government spending on healthcare to provide easy access to genetic testing avenues. Furthermore, European regulatory bodies are working on improving the regulations set on the direct-to-consumer genetic testing methods. Hence, the above-mentioned factors will play significant role in the market growth.
 

Focus of market players on introducing innovative direct-to-consumer genetic testing devices will offer several growth opportunities

Few of the eminent players operating in direct-to-consumer genetic testing market share include Ancestry, Color Genomics, Living DNA, Mapmygenome, Easy DNA, FamilytreeDNA (Gene By Gene), Full Genome Corporation, Helix OpCo LLC, Identigene, Karmagenes, MyHeritage, Pathway genomics, Genesis Healthcare, and 23andMe. These market players have undertaken various business strategies to enhance their financial stability and help them evolve as leading companies in the direct-to-consumer genetic testing industry.
 

For example, in November 2018, Helix launched a new genetic testing product, DNA discovery kit, that allows customer to delve into their ancestry. This development expanded the firm’s product portfolio, thereby propelling industry growth in the market.

The following posts discuss bioethical issues related to genetic testing and personalized medicine from a clinicians and scientisit’s perspective

Question: Each of these articles discusses certain bioethical issues although focuses on personalized medicine and treatment. Given your understanding of the robust process involved in validating clinical biomarkers and the current state of the DTC market, how could DTC testing results misinform patients and create mistrust in the physician-patient relationship?

Personalized Medicine, Omics, and Health Disparities in Cancer:  Can Personalized Medicine Help Reduce the Disparity Problem?

Diversity and Health Disparity Issues Need to be Addressed for GWAS and Precision Medicine Studies

Genomics & Ethics: DNA Fragments are Products of Nature or Patentable Genes?

The following posts discuss the bioethical concerns of genetic testing from a patient’s perspective:

Ethics Behind Genetic Testing in Breast Cancer: A Webinar by Laura Carfang of survivingbreastcancer.org

Ethical Concerns in Personalized Medicine: BRCA1/2 Testing in Minors and Communication of Breast Cancer Risk

23andMe Product can be obtained for Free from a new app called Genes for Good: UMich’s Facebook-based Genomics Project

Question: If you are developing a targeted treatment with a companion diagnostic, what bioethical concerns would you address during the drug development process to ensure fair, equitable and ethical treatment of all patients, in trials as well as post market?

Articles on Genetic Testing, Companion Diagnostics and Regulatory Mechanisms

Centers for Medicare & Medicaid Services announced that the federal healthcare program will cover the costs of cancer gene tests that have been approved by the Food and Drug Administration

Real Time Coverage @BIOConvention #BIO2019: Genome Editing and Regulatory Harmonization: Progress and Challenges

New York Times vs. Personalized Medicine? PMC President: Times’ Critique of Streamlined Regulatory Approval for Personalized Treatments ‘Ignores Promising Implications’ of Field

Live Conference Coverage @Medcitynews Converge 2018 Philadelphia: Early Diagnosis Through Predictive Biomarkers, NonInvasive Testing

Protecting Your Biotech IP and Market Strategy: Notes from Life Sciences Collaborative 2015 Meeting

Question: What type of regulatory concerns should one have during the drug development process in regards to use of biomarker testing? From the last article on Protecting Your IP how important is it, as a drug developer, to involve all payers during the drug development process?

Read Full Post »

Can the Public Benefit Company Structure Save US Healthcare?

Curator: Stephen J. Williams, Ph.D.

According to Centers for Medicare and Medicare Services (CMS.gov) healthcare spending per capita has reached 17.7 percent of GDP with, according to CMS data:

From 1960 through 2013, health spending rose from $147 per person to $9,255 per person, an average annual increase of 8.1 percent.

the National Health Expenditure Accounts (NHEA) are the official estimates of total health care spending in the United States. Dating back to 1960, the NHEA measures annual U.S. expenditures for health care goods and services, public health activities, government administration, the net cost of health insurance, and investment related to health care. The data are presented by type of service, sources of funding, and type of sponsor.

Graph: US National Healthcare Expenditures as a percent of Gross Domestic Product from 1960 to current. Recession periods are shown in bars. Note that the general trend has been increasing healthcare expenditures with only small times of decrease for example 2020 in year of COVID19 pandemic. In addition most of the years have been inflationary with almost no deflationary periods, either according to CPI or healthcare costs, specifically.

U.S. health care spending grew 4.6 percent in 2019, reaching $3.8 trillion or $11,582 per person.  As a share of the nation’s Gross Domestic Product, health spending accounted for 17.7 percent.

And as this spending grew (demand for health care services) associated costs also rose but as the statistical analyses shows there was little improvement in many health outcome metrics during the same time. 

Graph of the Growth of National Health Expenditures (NHE) versus the growth of GDP. Note most years from 1960 growth rate of NHE has always been higher than GDP, resulting in a seemingly hyperinflationary effect of healthcare. Also note how there are years when this disconnect is even greater, as there were years when NHE grew while there were recessionary periods in the general economy.

It appears that US healthcare may be on the precipice of a transformational shift, but what will this shift look like? The following post examines if the corporate structure of US healthcare needs to be changed and what role does a Public Benefit Company have in this much needed transformation.

Hippocratic Oath

I swear by Apollo the physician, and Asclepius, and Hygieia and Panacea and all the gods and goddesses as my witnesses, that, according to my ability and judgement, I will keep this Oath and this contract:

To hold him who taught me this art equally dear to me as my parents, to be a partner in life with him, and to fulfill his needs when required; to look upon his offspring as equals to my own siblings, and to teach them this art, if they shall wish to learn it, without fee or contract; and that by the set rules, lectures, and every other mode of instruction, I will impart a knowledge of the art to my own sons, and those of my teachers, and to students bound by this contract and having sworn this Oath to the law of medicine, but to no others.

I will use those dietary regimens which will benefit my patients according to my greatest ability and judgement, and I will do no harm or injustice to them.

I will not give a lethal drug to anyone if I am asked, nor will I advise such a plan; and similarly I will not give a woman a pessary to cause an abortion.

In purity and according to divine law will I carry out my life and my art.

I will not use the knife, even upon those suffering from stones, but I will leave this to those who are trained in this craft.

Into whatever homes I go, I will enter them for the benefit of the sick, avoiding any voluntary act of impropriety or corruption, including the seduction of women or men, whether they are free men or slaves.

Whatever I see or hear in the lives of my patients, whether in connection with my professional practice or not, which ought not to be spoken of outside, I will keep secret, as considering all such things to be private.

So long as I maintain this Oath faithfully and without corruption, may it be granted to me to partake of life fully and the practice of my art, gaining the respect of all men for all time. However, should I transgress this Oath and violate it, may the opposite be my fate.

Translated by Michael North, National Library of Medicine, 2002.

Much of the following information can be found on the Health Affairs Blog in a post entitled

Public Benefit Corporations: A Third Option For Health Care Delivery?

By Soleil Shah, Jimmy J. Qian, Amol S. Navathe, Nirav R. Shah

Limitations of For Profit and Non-Profit Hospitals

For profit represent ~ 25% of US hospitals and are owned and governed by shareholders, and can raise equity through stock and bond markets.

According to most annual reports, the CEOs incorrectly assume they are legally bound as fiduciaries to maximize shareholder value.  This was a paradigm shift in priorities of companies which started around the mid 1980s, a phenomenon discussed below.  

A by-product of this business goal, to maximize shareholder value, is that CEO pay and compensation is naturally tied to equity markets.  A means for this is promoting cost efficiencies, even in the midst of financial hardships.

A clear example of the failure of this system can be seen during the 2020- current COVID19 pandemic in the US. According to the Medicare Payment Advisory Commission, four large US hospitals were able to decrease their operating expenses by $2.3 billion just in Q2 2020.  This amounted to 65% of their revenue; in comparison three large NONPROFIT hospitals reduced their operating expense by an aggregate $13 million (only 1% of their revenue), evident that in lean times for-profit will resort to drastic cost cutting at expense of service, even in times of critical demands for healthcare.

Because of their tax structure and perceived fiduciary responsibilities, for-profit organizations (unlike non-profit and public benefit corporations) are not legally required to conduct community health need assessments, establish financial assistance policies, nor limit hospital charges for those eligible for financial assistance.  In addition to the difference in tax liability, for-profit, unlike their non-profit counterparts, at least with hospitals, are not funded in part by state or local government.  As we will see, a large part of operating revenue for non-profit university based hospitals is state and city funding.

Therefore risk for financial responsibility is usually assumed by the patient, and in worst case, by the marginalized patient populations on to the public sector.

Tax Structure Considerations of for-profit healthcare

Financials of major for-profit healthcare entities (2020 annual)

Non-profit Healthcare systems

Nonprofits represent about half of all hospitals in the US.  Most of these exist as a university structure, so retain the benefits of being private health systems and retaining the funding and tax benefits attributed to most systems of higher education. And these nonprofits can be very profitable.  After taking in consideration the state, local, and federal tax exemptions these nonprofits enjoy, as well as tax-free donations from contributors (including large personal trust funds), a nonprofit can accumulate a large amount of revenue after expenses.  In fact 82 nonprofit hospitals had $33 billion of net asset increase year-over-year (20% increase) from 2016 to 2017.  The caveat is that this revenue over expenses is usually spent on research or increased patient services (this may mean expanding the physical infrastructure of the hospital or disseminating internal grant money to clinical investigators, expanding the hospital/university research assets which could result in securing even larger amount of external funding from government sources.

And although this model may work well for intercity university/healthcare systems, it is usually a struggle for the rural nonprofit hospitals.  In 2020, ten out of 17 rural hospitals that went under were nonprofits.  And this is not just true in the tough pandemic year.  Over the past two decades multitude of nonprofit rural hospitals had to sell and be taken over by larger for-profit entities. 

Hospital consolidation has led to a worse patient experience and no real significant changes in readmission or mortality data.  (The article below is how over 130 rural hospitals have closed since 2010, creating a medical emergency in rural US healthcare)

https://www.nationalgeographic.com/history/article/appalachian-hospitals-are-disappearing

And according to the article below it is only to get worse

The authors of the Health Affairs blog feel a major disadvantage of both the for-profit and non-profit healthcare systems is “that both face limited accountability with respect to anticompettive mergers and acquisitions.”

More hospital consolidation is expected post-pandemic

Aug 10, 2020

By Rich Daly, HFMA Senior Writer and Editor

News | Coronavirus

More hospital consolidation is expected post-pandemic

  • Hospital deal volume is likely to accelerate due to the financial damage inflicted by the coronavirus pandemic.
  • The anticipated increase in volume did not show up in the latest quarter, when deals were sharply down.
  • The pandemic may have given hospitals leverage in coming policy fights over billing and the creation of “public option” health plans.

Hospital consolidation is likely to increase after the COVID-19 pandemic, say both critics and supporters of the merger-and-acquisition (M&A) trend.

The financial effects of the coronavirus pandemic are expected to drive more consolidation between and among hospitals and physician practices, a group of policy professionals told a recent Washington, D.C.-based web briefing sponsored by the Alliance for Health Policy.

“There is a real danger that this could lead to more consolidation, which if we’re not careful could lead to higher prices,” said Karyn Schwartz, a senior fellow at the Kaiser Family Foundation (KFF).

Schwartz cited a recent KFF analysis of available research that concluded “provider consolidation leads to higher health care prices for private insurance; this is true for both horizontal and vertical consolidation.”

Kenneth Kaufman, managing director and chair of Kaufman Hall, noted that crises tend to push financially struggling organizations “further behind.”

“I wouldn’t be surprised at all if that happens,” Kaufman said. “That will lead to further consolidation in the provider market.”

The initial rounds of federal assistance from the CARES Act, which were based first on Medicare revenue and then on net patient revenue, may fuel consolidation, said Mark Miller, PhD, executive vice president of healthcare for Arnold Ventures. That’s because the funding formulas favored organizations that already had higher revenues, he said, and provided less assistance to low-revenue organizations.

HHS has distributed $116.2 billion from the $175 billion in provider funding available through the CARES Act and the Paycheck Protection Program and Health Care Enhancement Act. The largest distributions used the two revenue formulas cited by Miller.

No surge in M&A yet

The expected burst in hospital M&A activity has yet to occur. Kaufman Hall identified 14 transactions in the second quarter of 2020, far fewer than in the same quarter in any of the four preceding years, when second-quarter transactions totaled between 19 and 31. The latest deals were not focused on small hospitals, with average seller revenue of more than $800 million — far larger than the previous second-quarter high of $409 million in 2018.

Six of the 14 announced transactions were divestitures by major for-profit health systems, including Community Health Systems, Quorum and HCA.

Kaufman Hall’s analysis of the recent deals identified another pandemic-related factor that may fuel hospital M&A: closer ties between hospitals. The analysis cited the example of  Lifespan and Care New England, which had suspended merger talks in 2019. More recently, in a joint announcement, the CEOs of the two systems noted that because of the COVID-19 crisis, the two systems “have been working together in unprecedented ways” and “have agreed to enter into an exploration process to understand the pros and cons of what a formal continuation of this collaboration could look like in the future.”

The M&A outlook for rural hospitals

The pandemic has had less of a negative effect on the finances of rural hospitals that previously joined larger health systems, said Suzie Desai, senior director of not-for-profit healthcare for S&P Global.

A CEO of a health system with a large rural network told Kaufman the federal grants that the system received for its rural hospitals were much larger than the grants paid through the general provider fund.

“If that was true across the board, then the federal government recognized that many rural hospitals could be at risk of not being able to make payroll; actually running out of money,” Kaufman said. “And they seem to have bent over backwards to make sure that didn’t happen.”  

Other CARES Act funding distributed to providers included:

  • $12.8 billion for 959 safety net hospitals
  • $11 billion to almost 4,000 rural healthcare providers and hospitals in urban areas that have certain special rural designations in Medicare

Telehealth has helped rural hospitals but has not been sufficient to address the financial losses inflicted by the pandemic, Desai said.

Other coming trends include a sharper cost focus

Desai expects an increasing focus “over the next couple years” on hospital costs because of the rising share of revenue received from Medicare and Medicaid. She expects increased efforts to use technology and data to lower costs.

Billy Wynne, JD, chairman of Wynne Health Group, expects telehealth restrictions to remain relaxed after the pandemic.

Also, the perceptions of the public and politicians about the financial health of hospitals are likely to give those organizations leverage in coming policy fights over changes such as banning surprise billing and creating so-called public-option health plans, Wynne said. As an example, he cited the Colorado legislature’s suspension of the launch of a public option “in part because of sensitivities around hospital finances in the COVID pandemic.”

“Once the dust settles, it’ll be interesting to see if their leverage has increased or decreased due to what we’ve been through,” Wynne said.

About the Author

Rich Daly, HFMA Senior Writer and Editor,

is based in the Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Source: https://www.hfma.org/topics/news/2020/08/more-hospital-consolidation-is-expected-post-pandemic.html

From Harvard Medical School

Hospital Mergers and Quality of Care

A new study looks at the quality of care at hospitals acquired in a recent wave of consolidations

By JAKE MILLER January 16, 2020 Research

Two train tracks merge in a blurry sunset.

Image: NirutiStock / iStock / Getty Images Plus       

The quality of care at hospitals acquired during a recent wave of consolidations has gotten worse or stayed the same, according to a study led by Harvard Medical School scientists published Jan. 2 in NEJM.

The findings deal a blow to the often-cited arguments that hospital consolidation would improve care. A flurry of earlier studies showed that mergers increase prices. Now after analyzing patient outcomes after hundreds of hospital mergers, the new research also dashes the hopes that this more expensive care might be of higher quality.

Get more HMS news here

“Our findings call into question claims that hospital mergers are good for patients—and beg the question of what we are getting from higher hospital prices,” said study senior author J. Michael McWilliams, the Warren Alpert Foundation Professor of Health Care Policy in the Blavatnik Institute at HMS and an HMS professor of medicine and a practicing general internist at Brigham and Women’s Hospital.

McWilliams noted that rising hospital prices have been one of the leading drivers of unsustainable growth in U.S. health spending.   

To examine the impact of hospital mergers on quality of care, researchers from HMS and Harvard Business School examined patient outcomes from nearly 250 hospital mergers that took place between 2009 and 2013. Using data collected by the Centers for Medicare and Medicaid Services, they analyzed variables such as 30-day readmission and mortality rates among patients discharged from a hospital, as well as clinical measures such as timely antibiotic treatment of patients with bacterial pneumonia. The researchers also factored in patient experiences, such as whether those who received care at a given hospital would recommend it to others. For their analysis, the team compared trends in these indicators between 246 hospitals acquired in merger transactions and unaffected hospitals.

The verdict? Consolidation did not improve hospital performance, and patient-experience scores deteriorated somewhat after the mergers.

The study was not designed to examine the reasons behind the worsening in patient experience. Weakening of competition due to hospital mergers could have contributed, the researchers said, but deeper exploration suggested other potential mechanisms. Notably, the analysis found the decline in patient-experience scores occurred mainly in hospitals acquired by hospitals that already had a poor patient-experience score—a finding that suggests acquisitions facilitate the spread of low quality care but not of high quality care.

The researchers caution that isolated, individual mergers may have still yielded positive results—something that an aggregate analysis is not powered to capture. And the researchers could only examine measurable aspects of quality. The trend in hospital performance on these standard measures, however, appears to point to a net effect of overall decline, the team said.

“Since our study estimated the average effects of mergers, we can’t rule out the possibility that some mergers are good for patient care,” said first author Nancy Beaulieu, research associate in health care policy at HMS. “But this evidence should give us pause when considering arguments for hospitals mergers.”

The work was supported by the Agency for Healthcare Research and Quality (grant no. U19HS024072).

Co-investigators included Bruce Landon and Jesse Dalton from HMS, Ifedayo Kuye, from the University of California, San Francisco, and Leemore Dafny from Harvard Business School and the National Bureau of Economic Research.

Source: https://hms.harvard.edu/news/hospital-mergers-quality-care

Public Benefit Corporations (PBC)

     Public benefit corporations (versus Benefit Corporate status, which is more of a pledge) are separate legal entities which exist as a hybrid, for-profit/nonprofit company but is mandated to 

  1. Pursue a general or specific public benefit
  2. Consider the non-financial interests of its shareholders and other STAKEHOLDERS when making decision
  3. report how well it is achieving its overall public benefit objectives
  4. Have limited fiduciary responsibility to investors that remains IN SCOPE of public benefit goal

In essence, the public benefit corporations executives are mandated to run the company for the benefit of STAKEHOLDERS first, if those STAKEHOLDERS are the public beneficiary of the company’s goals.  This in essence moves the needle away from the traditional C-Corp overvaluing the needs of shareholders and brings back the mission of the company and in the case of healthcare, the needs of its stakeholders, the consumers of healthcare.

     PBCs are legal entities recognized by states rather than by the federal government.  So far, in 2020 about 37 states allow companies to incorporate as a PBC.  Stipulations of the charter include semiannual reporting of the public benefits bestowed by the company and how well it is achieving its public benefit mandate.  There are about 3,000 US PBCs. Some companies have felt it was in their company mission and financial interest to change incorporation as a PBC.

Some well known PBCs include

  1. Ben and Jerry’s Ice Cream
  2. American Red Cross
  3. Susan B. Komen Foundation
  4. Allbirds (a shoe startup valued at $1.7 billion when made switch)
  5. Bombas (the sock company that donates extra socks when you buy a pair)
  6. Lemonade (a publicly traded insurance PBC that has beneficiaries select a nonprofit that the company will donate to)

Although the number of PBCs in the healthcare arena is increasing

  1. Not many PBCs are in the area of healthcare delivery 
  2. Noone is quite sure what the economic model would look like for a healthcare delivery PBC

Some example of hospital PBC include NYC Health + Hospitals and Community First Medical Center in Chicago.

Benefits of moving a hospital to PBC Status

  1. PBCs are held legally accountable to a predefined public benefit.  For hospitals this could be delivering cost-effective quality of care and affordable to a local citizenry or an economically disadvantaged population.  PBCs must produce at least an annual report on the public benefits it has achieved contrasted against a third party standard.  For example a hospital could include data of Medicaid related mortality risks, data neither the C-corp nor the nonprofit 501c would have to report on.  Most nonprofits and charities report their taxes on a schedule H or Form 990, which only has to report the officer’s compensation as well as monies given to charitable organizations, or other 501 organizations.  The nonprofit would show a balance of zero as the donated money for that year would be allocated out for various purposes. Hospitals, even as nonprofits, are not required to submit all this data.  Right now in US the ACA just requires any hospital that receives government or ACA insurance payments to report certain outcome statistics.  Although varying state by state, a PBC should have a “benefit officer” to make sure the mandate is being met.  In some cases a PBC benefit officer could sue the board for putting shareholder interest over the public benefit mandate.
  2. A PBC can include community stakeholders in the articles of incorporation thus giving a voice to local community members.  This would be especially beneficial for a hospital serving, say, a rural community.
  3. PBCs do have advantages of the for-profit companies as they are not limited to non-equity forms of investment.  A PBC can raise money in the equity markets or take on debt and finance it.  These financial instruments are unavailable to the non-profit.  Yet one interesting aspect is that PBCs require a HIGHER voting threshold by shareholders than a traditional for profit company in the ability to change their public benefit or convert their PBC back to a for-profit.

Limitations of the PBC

  1. Little incentive financially for current and future hospitals to incorporate as a PBC.  Herein lies a huge roadblock given the state of our reimbursement structure in this country.  Although there may be an incentive with regard to hiring and retention of staff drawn to the organization’s social purpose.  There have been, in the past, suggestions to allow hospitals that incorporate at PBC to receive some tax benefit, but this legislation has not gone through either at state or federal level. (put link to tax article).  
  2. In order for there to be value to constituents (patients) there must be strong accountability measures.  This will require the utmost in ethical behavior by a board and executives.  We have witnessed, through M&A by large health groups, anticompetitive and near monopoly behavior.
  3. There are no federal guidelines but varying guidelines from state to state.  There must be some federal recognition of the PBC status when it comes to healthcare, such as that the government is one of the biggest payers of US healthcare.

This is a great interview with ArcHealth, a PBC healthcare system.

Source: https://www.archealthjustice.com/arc-health-as-public-benefit-company-and-social-enterprise-what-is-the-difference/

Arc Health as a Public Benefit Company and Social Enterprise – What is the difference?

Mar 3, 2021 | Healthcare

Arc Health PBC is a public benefit corporation, a mission-driven for-profit company that utilizes a market-driven approach to achieving our short and long-term social goals. As a public benefit corporation, Arc Health is also a social enterprise working to further our mission of providing healthcare to rural, underserved, and indigenous communities through business practices that improve the recruitment and retention of quality healthcare providers.

What is a Social Enterprise?

While there is no one exact definition, according to the Social Enterprise Alliance, a social enterprise is an “organization that addresses a basic unmet need or solves a social or environmental problem through a market-driven approach.” A social enterprise is not a distinct legal entity, but instead, an “ideological spectrum marrying commercial approaches with social good.” Social enterprises foster a dual-bottom-line – simultaneously seeking profits and social impact. Arc Health, like many social enterprises, seeks to be self–sustainable. 

Two primary structures fall under the social enterprise umbrella: nonprofits and for-profit organizations. There are also related entities within both structures that could be considered social enterprises. Any of these listed structures can be regarded as a social enterprise depending on if and how involved they are with socially beneficial programs.

What is a Public Benefit Corporation?

Public Benefit Corporations (PBCs), also known as benefit corporations, are “for-profit companies that balance maximizing value to stakeholders with a legally binding commitment to a social or environmental mission.” PBCs operate as for-profit entities with no tax advantages or exemptions. Still, they must have a “purpose of creating general public benefit,” such as promoting the arts or science, preserving the environment, or providing benefits to underserved communities. PBCs must attain a higher degree of corporate purpose, expanded accountability, and expected transparency. 

There are now  over 3,000 registered PBCs, comprising approximately 0.1% of American businesses.

 As a PBC, Arc Health expects to access capital through individual investors who seek financial returns, rather than through donations. Arc Health’s investors make investments with a clear understanding of the balance the company must strike between financial returns (I.e., profitability) and social purpose. Therefore, investors expect the company to be operationally profitable to ensure a financial return on their investments, while also making clear to all stakeholders and the public that generating social impact is the priority. 

What is the difference between a Social Enterprise and PBC?

Social enterprises and PBCs emulate similar ideals that value the importance and need to invoke social change vis-a-vis working in a market-driven industry. Public benefit corporations fall under the social enterprise umbrella. An organization may choose to use a social enterprise model and incorporate itself as either a not-for-profit, C-Corp, PBC, or other corporate structure.  

How did Arc Health Become a Public Benefit Corporation?

Arc Health was initially formed as a C-Corp. In 2019, Arc Health’s CEO and Co-Founder, Dave Shaffer, guided the conversion from a C-Corp to a PBC, incorporated in Delaware. Today, Arc Health follows guidelines and expectations for PBCs, including adhering to the State of Delaware’s requirements for PBCs. 

Why is Arc Health a Social Enterprise and Public Benefit Corporation?

Arc Health believes it is essential to commit ourselves to our mission and demonstrate our dedication through our actions. We work to adhere to the core values of accountability, transparency, and purpose. As a registered public benefit company and a social enterprise, we execute our drive to achieve health equity in tangible and effective ways that the communities we work with, our stakeholders, and our providers expect of us.  

90% of Americans say that companies must not only say a product or service is beneficial, but they also need to prove its benefit.

When we partner with health clinics and hospitals, we aim to provide services that enact lasting change. For example, we work with healthcare providers who desire to contribute both clinical and non-clinical skills. In 2020, Arc Health clinicians developed COVID-19 response protocols and educational materials about the vaccines. They participated in pain management working groups. They identified and followed up with kids in the community who were overdue for a well-child check. Arc Health providers should be driven by a desire to develop a long-term relationship with a healthcare service provider and participate in its successes and challenges.   

Paradigm Shift in the 1980’s: Companies Start to Emphasize Shareholders Over Stakeholders

So earlier in this post we had mentioned about a shift in philosophy at the corporate boardroom that affected how comparate thought, value, and responsibility: Companies in the 1980s started to shift their focus and value only the needs of corporate ShAREHOLDERS at the expense of their  traditional STAKEHOLDERS (customers, clients).  Many movies and books have been written on this and debatable if deliberate or a by-product of M&A, hostile takeovers, and the stock market in general but the effect was that the consumer was relegated as having less value, even though marketing budgets are very high.  The fiduciary responsibility of the executive was now defined in terms of satisfying shareholders, who were now  big huge and powerful brokerage houses, private equity, and hedge funds.  A good explanation by Medium.com Tyler Lasicki is given below.

From the Medium.com

Source: https://medium.com/swlh/the-shareholder-v-stakeholder-contrast-a-brief-history-c5a6cfcaa111

The Shareholder V. Stakeholder Contrast, a Brief History

Tyler Lasicki

Follow

May 26, 2020 · 14 min read

Introduction

In a famous 1970 New York Times Article, Milton Friedman postulated that the CEO, as an employee of the shareholder, must strive to provide the highest possible return for all shareholders. Since that article, the United States has embraced this idea as the fundamental philosophy supporting the ultimate purpose of businesses — The Shareholders Come First.

In August of 2019, the Business Roundtable, a group made up of the most influential U.S CEOs, published a letter shifting their stance on the purpose of a corporation. Regardless of whether this piece of paper will actually result in any systematic changes has yet to be seen, however this newly stated purpose of business is a dramatic shift from the position Milton Friedman took in 1970. According to the statement, these corporations will no longer prioritize maximizing profits for shareholders, but instead turn their focus to benefiting all stakeholders — including citizens, customers, suppliers, employees, on par with shareholders. 

Now the social responsibility of a company and the CEO was to maxiimize the profits even at the expense of any previous social responsibility they once had.

Small sample of the 181 Signatures attached to the Business Roundtable’s letter

What has happened over the past 50 years that has led to such a fundamental change in ideology? What has happened to make the CEO’s of America’s largest corporations suddenly change their stance on such a foundational principle of what it means to be an American business?

Since diving into this subject, I have come to find that the “American fundamental principle” of putting shareholders first is one that is actually not all that fundamental. In fact, for a large portion of our nation’s history this ideology was actually seen as the unpopular position.

Key ideological shifts in U.S. history

This post dives into a brief history of these two contrasting ideological viewpoints in an attempt to contextualize the forces behind both sides — specifically, the most recent shift (1970–2019). This basic idea of what is most important; the stakeholder or the shareholder, is the underlying reason as to why many things are the way they are today. A corporation’s priority of shareholder or stakeholder ultimately impacts employee salaries, benefits, quality of life within communities, environmental conditions, even the access to education children can receive. It affects our lives in a breadth and depth of ways and now that corporations may be changing positions (yet again) to focus on a model that prioritizes the stakeholder, it is important to understand why.

Looking forward, if stakeholder priority ends up being the popular position among American businesses, how long will it last for? What could lead to its downfall? And what will managers do to ensure a long term stakeholder-friendly business model?

It is clear to me the reasons that have led to these shifts in ideology are rather nuanced, however I want to highlight a few trends that have had a major impact on businesses changing their priorities while also providing context as to why things have shifted.

The Ascendancy of Shareholder Value

Following the 1929 stock market crash and the Great Depression, stakeholder primacy became the popular perspective within corporate America. Stakeholder primacy is the idea that corporations are to consider a wider group of interested parties (not just shareholders) whose positions need to be taken into consideration by corporate governance. According to this point of view, rather than solely being an agent for shareholders, management’s responsibilities were to be dispersed among all of its constituencies, even if it meant a reduction in shareholder value. This ideology lasted as the dominant position for roughly 40 years, in part due to public opinion and strong views on corporate responsibility, but also through state adoption of stakeholder laws.

By the mid-1970s, falling corporate profitability and stagnant share prices had been the norm for a decade. This poor economic performance influenced a growing concern in the U.S. regarding the perceived divergence between manager and shareholder interest. Many held the position that profits and share prices were suffering as a result of corporation’s increased attention on stakeholder groups.

This noticeable divergence in interests sparked many academics to focus their research on corporate management’s motivations in decision making regarding their allocation of resources. This branch of research would later be known as agency theory, which focused on the relationship between principals (shareholders) and their agents (management). Research at the time outlined how over the previous decades corporate management had pursued strategies that were not likely to optimize resources from a shareholder’s perspective. These findings were part of a seismic shift of corporate philosophy, changing priority from the stakeholders of a business to the shareholders.

By 1982, the U.S. economy started to recover from a prolonged period of high inflation and low economic growth. This recovery acted as a catalyst for change in many industries, leaving many corporate management teams to struggle in response to these changes. Their business performance suffered as a result. These distressed businesses became targets for a group of new investors…private equity firms.

Now the paradigm shift had its biggest backer…. private equity!  And private equity care about ONE thing….. THEIR OWN SHARE VALUE and subsequently meaning corporate profit, which became the most important directive for the CEO.

So it is all hopeless now? Can there be a shift back to the good ‘ol days?  

Well some changes are taking place at top corporate levels which may help the stakeholders to have a voice at the table, as the following IRMagazine article states.

And once again this is being led by the Business Roundtable, the same Business Roundtable that proposed the shift back in the 1970s.

Andrew Holt

Andrew Holt

REPORTER

  •  
  •  

SHAREHOLDER VALUE

CORPORATE GOVERNANCE

Shift from shareholder value to stakeholder-focused model for top US firms

AUG 23, 2019

Business Roundtable reveals corporations to drop idea they function to serve shareholders only

Source: https://www.irmagazine.com/esg/shift-shareholder-value-stakeholder-focused-model-top-us-firms

Andrew Holt

Andrew Holt

REPORTER

n a major corporate shift, shareholder value is no longer the main objective of the US’ top company CEOs, according to the Business Roundtable, which instead emphasizes the ‘purpose of a corporation’ and a stakeholder-focused model.

The influential body – a group of chief executive officers from major US corporations – has stressed the idea of a corporation dropping the age-old notion that corporations function first and foremost to serve their shareholders and maximize profits.

Rather, the focus should be on investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities as the vanguard of American business, according to a Business Roundtable statement.

‘While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders,’ reads the statement, signed by 181 CEOs. ‘We commit to deliver value to all of them, for the future success of our companies, our communities and our country.’

Gary LaBranche, president and CEO of NIRI, tells IR Magazine that this is part of a wider trend: ‘The redefinition of purpose from shareholder-focused to stakeholder-focused is not new to NIRI members. For example, a 2014 IR Update article by the late Professor Lynn Stout urges a more inclusive way of thinking about corporate purpose.’ 

NIRI has also addressed this concept at many venues, including the senior roundtable annual meeting and the NIRI Annual Conference, adds LaBranche. This trend was further seen in the NIRI policy statement on ESG disclosure, released in January this year. 

Analyzing the meaning of this change in more detail, LaBranche adds: ‘The statement is a revolutionary break with the Business Roundtable’s previous position that the purpose of the corporation is to create value for shareholders, which was a long-held position championed by Milton Friedman.

‘The challenge is that Friedman’s thought leadership helped to inspire the legal and regulatory regime that places wealth creation for shareholders as the ‘prime directive’ for corporate executives.

‘Thus, commentators like Mike Allen of Axios are quick to point out that some shareholders may actually use the new statement to accuse CEOs of worrying about things beyond increasing the value of their shares, which, Allen reminds us, is the CEOs’ fiduciary responsibility.

‘So while the new Business Roundtable statement reflects a much-needed rebalancing and modernization that speaks to the comprehensive responsibilities of corporate citizens, we can expect that some shareholders will push back on this more inclusive view of who should benefit from corporate efforts and the capital that makes it happen. The new statement may not mark the dawn of a new day, but it perhaps signals the twilight of the Friedman era.’

In a similarly reflective way, Jamie Dimon, chairman and CEO of JPMorgan Chase & Co and chairman of the Business Roundtable, says: ‘The American dream is alive, but fraying. Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.’

Note:  Mr Dimon has been very vocal for many years on corporate social responsibility, especially since the financial troubles of 2009.

Other related articles published on this Open Access Online Scientific Journal on Healthcare Issues include the following:

Opportunity Mapping of the E-Health Sector prior to COVID19 Outbreak
mHealth market growth in America, Europe, & APAC
Ethics Behind Genetic Testing in Breast Cancer: A Webinar by Laura Carfang of survivingbreastcancer.org
The Inequality and Health Disparity seen with the COVID-19 Pandemic Is Similar to Past Pandemics
Live Notes from @HarvardMed Bioethics: Authors Jerome Groopman, MD & Pamela Hartzband, MD, discuss Your Medical Mind
COVID-related financial losses at Mass General Brigham
Personalized Medicine, Omics, and Health Disparities in Cancer:  Can Personalized Medicine Help Reduce the Disparity Problem?

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US Responses to Coronavirus Outbreak Expose Many Flaws in Our Medical System

US Responses to Coronavirus Outbreak Expose Many Flaws in Our Medical System

Curator: Stephen J. Williams, Ph.D.

The  coronavirus pandemic has affected almost every country in every continent however, after months of the novel advent of novel COVID-19 cases, it has become apparent that the varied clinical responses in this epidemic (and outcomes) have laid bare some of the strong and weak aspects in, both our worldwide capabilities to respond to infectious outbreaks in a global coordinated response and in individual countries’ response to their localized epidemics.

 

Some nations, like Israel, have initiated a coordinated government-private-health system wide action plan and have shown success in limiting both new cases and COVID-19 related deaths.  After the initial Wuhan China outbreak, China closed borders and the government initiated health related procedures including the building of new hospitals. As of writing today, Wuhan has experienced no new cases of COVID-19 for two straight days.

 

However, the response in the US has been perplexing and has highlighted some glaring problems that have been augmented in this crisis, in the view of this writer.    In my view, which has been formulated after social discussion with members in the field ,these issues can be centered on three major areas of deficiencies in the United States that have hindered a rapid and successful response to this current crisis and potential future crises of this nature.

 

 

  1. The mistrust or misunderstanding of science in the United States
  2. Lack of communication and connection between patients and those involved in the healthcare industry
  3. Socio-geographical inequalities within the US healthcare system

 

1. The mistrust or misunderstanding of science in the United States

 

For the past decade, anyone involved in science, whether directly as active bench scientists, regulatory scientists, scientists involved in science and health policy, or environmental scientists can attest to the constant pressure to not only defend their profession but also to defend the entire scientific process and community from an onslaught of misinformation, mistrust and anxiety toward the field of science.  This can be seen in many of the editorials in scientific publications including the journal Science and Scientific American (as shown below)

 

Stepping Away from Microscopes, Thousands Protest War on Science

Boston rally coincides with annual American Association for the Advancement of Science (AAAS) conference and is a precursor to the March for Science in Washington, D.C.

byLauren McCauley, staff writer

Responding to the troubling suppression of science under the Trump administration, thousands of scientists, allies, and frontline communities are holding a rally in Boston’s Copley Square on Sunday.

#standupforscience Tweets

 

“Science serves the common good,” reads the call to action. “It protects the health of our communities, the safety of our families, the education of our children, the foundation of our economy and jobs, and the future we all want to live in and preserve for coming generations.”

It continues: 

But it’s under attack—both science itself, and the unalienable rights that scientists help uphold and protect. 

From the muzzling of scientists and government agencies, to the immigration ban, the deletion of scientific data, and the de-funding of public science, the erosion of our institutions of science is a dangerous direction for our country. Real people and communities bear the brunt of these actions.

The rally was planned to coincide with the annual American Association for the Advancement of Science (AAAS) conference, which draws thousands of science professionals, and is a precursor to the March for Science in Washington, D.C. and in cities around the world on April 22.

 

Source: https://www.commondreams.org/news/2017/02/19/stepping-away-microscopes-thousands-protest-war-science

https://images.app.goo.gl/UXizCsX4g5wZjVtz9

 

https://www.washingtonpost.com/video/c/embed/85438fbe-278d-11e7-928e-3624539060e8

 

 

The American Association for Cancer Research (AACR) also had marches for public awareness of science and meaningful science policy at their annual conference in Washington, D.C. in 2017 (see here for free recordings of some talks including Joe Biden’s announcement of the Cancer Moonshot program) and also sponsored events such as the Rally for Medical Research.  This patient advocacy effort is led by the cancer clinicians and scientific researchers to rally public support for cancer research for the benefit of those affected by the disease.

Source: https://leadingdiscoveries.aacr.org/cancer-patients-front-and-center/

 

 

     However, some feel that scientists are being too sensitive and that science policy and science-based decision making may not be under that much of a threat in this country. Yet even as some people think that there is no actual war on science and on scientists they realize that the public is not engaged in science and may not be sympathetic to the scientific process or trust scientists’ opinions. 

 

   

From Scientific American: Is There Really a War on Science? People who oppose vaccines, GMOs and climate change evidence may be more anxious than antagonistic

 

Certainly, opponents of genetically modified crops, vaccinations that are required for children and climate science have become louder and more organized in recent times. But opponents typically live in separate camps and protest single issues, not science as a whole, said science historian and philosopher Roberta Millstein of the University of California, Davis. She spoke at a standing-room only panel session at the American Association for the Advancement of Science’s annual meeting, held in Washington, D.C. All the speakers advocated for a scientifically informed citizenry and public policy, and most discouraged broadly applied battle-themed rhetoric.

 

Source: https://www.scientificamerican.com/article/is-there-really-a-war-on-science/

 

      In general, it appears to be a major misunderstanding by the public of the scientific process, and principles of scientific discovery, which may be the fault of miscommunication by scientists or agendas which have the goals of subverting or misdirecting public policy decisions from scientific discourse and investigation.

 

This can lead to an information vacuum, which, in this age of rapid social media communication,

can quickly perpetuate misinformation.

 

This perpetuation of misinformation was very evident in a Twitter feed discussion with Dr. Eric Topol, M.D. (cardiologist and Founder and Director of the Scripps Research Translational  Institute) on the US President’s tweet on the use of the antimalarial drug hydroxychloroquine based on President Trump referencing a single study in the International Journal of Antimicrobial Agents.  The Twitter thread became a sort of “scientific journal club” with input from international scientists discussing and critiquing the results in the paper.  

 

Please note that when we scientists CRITIQUE a paper it does not mean CRITICIZE it.  A critique is merely an in depth analysis of the results and conclusions with an open discussion on the paper.  This is part of the normal peer review process.

 

Below is the original Tweet by Dr. Eric Topol as well as the ensuing tweet thread

 

https://twitter.com/EricTopol/status/1241442247133900801?s=20

 

Within the tweet thread it was discussed some of the limitations or study design flaws of the referenced paper leading the scientists in this impromptu discussion that the study could not reasonably conclude that hydroxychloroquine was not a reliable therapeutic for this coronavirus strain.

 

The lesson: The public has to realize CRITIQUE does not mean CRITICISM.

 

Scientific discourse has to occur to allow for the proper critique of results.  When this is allowed science becomes better, more robust, and we protect ourselves from maybe heading down an incorrect path, which may have major impacts on a clinical outcome, in this case.

 

 

2.  Lack of communication and connection between patients and those involved in the healthcare industry

 

In normal times, it is imperative for the patient-physician relationship to be intact in order for the physician to be able to communicate proper information to their patient during and after therapy/care.  In these critical times, this relationship and good communication skills becomes even more important.

 

Recently, I have had multiple communications, either through Twitter, Facebook, and other social media outlets with cancer patients, cancer advocacy groups, and cancer survivorship forums concerning their risks of getting infected with the coronavirus and how they should handle various aspects of their therapy, whether they were currently undergoing therapy or just about to start chemotherapy.  This made me realize that there were a huge subset of patients who were not receiving all the information and support they needed; namely patients who are immunocompromised.

 

These are patients represent

  1. cancer patient undergoing/or about to start chemotherapy
  2. Patients taking immunosuppressive drugs: organ transplant recipients, patients with autoimmune diseases, multiple sclerosis patients
  3. Patients with immunodeficiency disorders

 

These concerns prompted me to write a posting curating the guidance from National Cancer Institute (NCI) designated cancer centers to cancer patients concerning their risk to COVID19 (which can be found here).

 

Surprisingly, there were only 14 of the 51 US NCI Cancer Centers which had posted guidance (either there own or from organizations like NCI or the National Cancer Coalition Network (NCCN).  Most of the guidance to patients had stemmed from a paper written by Dr. Markham of the Fred Hutchinson Cancer Center in Seattle Washington, the first major US city which was impacted by COVID19.

 

Also I was surprised at the reactions to this posting, with patients and oncologists enthusiastic to discuss concerns around the coronavirus problem.  This led to having additional contact with patients and oncologists who, as I was surprised, are not having these conversations with each other or are totally confused on courses of action during this pandemic.  There was a true need for each party, both patients/caregivers and physicians/oncologists to be able to communicate with each other and disseminate good information.

 

Last night there was a Tweet conversation on Twitter #OTChat sponsored by @OncologyTimes.  A few tweets are included below

https://twitter.com/OncologyTimes/status/1242611841613864960?s=20

https://twitter.com/OncologyTimes/status/1242616756658753538?s=20

https://twitter.com/OncologyTimes/status/1242615906846547978?s=20

 

The Lesson:  Rapid Communication of Vital Information in times of stress is crucial in maintaining a good patient/physician relationship and preventing Misinformation.

 

3.  Socio-geographical Inequalities in the US Healthcare System

It has become very clear that the US healthcare system is fractioned and multiple inequalities (based on race, sex, geography, socio-economic status, age) exist across the whole healthcare system.  These inequalities are exacerbated in times of stress, especially when access to care is limited.

 

An example:

 

On May 12, 2015, an Amtrak Northeast Regional train from Washington, D.C. bound for New York City derailed and wrecked on the Northeast Corridor in the Port Richmond neighborhood of Philadelphia, Pennsylvania. Of 238 passengers and 5 crew on board, 8 were killed and over 200 injured, 11 critically. The train was traveling at 102 mph (164 km/h) in a 50 mph (80 km/h) zone of curved tracks when it derailed.[3]

Some of the passengers had to be extricated from the wrecked cars. Many of the passengers and local residents helped first responders during the rescue operation. Five local hospitals treated the injured. The derailment disrupted train service for several days. 

(Source Wikipedia https://en.wikipedia.org/wiki/2015_Philadelphia_train_derailment)

What was not reported was the difficulties that first responders, namely paramedics had in finding an emergency room capable of taking on the massive load of patients.  In the years prior to this accident, several hospitals, due to monetary reasons, had to close their emergency rooms or reduce them in size. In addition only two in Philadelphia were capable of accepting gun shot victims (Temple University Hospital was the closest to the derailment but one of the emergency rooms which would accept gun shot victims. This was important as Temple University ER, being in North Philadelphia, is usually very busy on any given night.  The stress to the local health system revealed how one disaster could easily overburden many hospitals.

 

Over the past decade many hospitals, especially rural hospitals, have been shuttered or consolidated into bigger health systems.  The graphic below shows this

From Bloomberg: US Hospital Closings Leave Patients with Nowhere to go

 

 

https://images.app.goo.gl/JdZ6UtaG3Ra3EA3J8

 

Note the huge swath of hospital closures in the midwest, especially in rural areas.  This has become an ongoing problem as the health care system deals with rising costs.

 

Lesson:  Epidemic Stresses an already stressed out US healthcare system

 

Please see our Coronavirus Portal at

https://pharmaceuticalintelligence.com/coronavirus-portal/

 

for more up-to-date scientific, clinical information as well as persona stories, videos, interviews and economic impact analyses

and @pharma_BI

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Funding Research by Lottery?: How Lucky Do You Feel After Submitting a Grant

Reporter: Stephen J. Williams, Ph.D.

A recent article in Nature: “Science Funders Gamble on Grant Lotteries” discusses an odd twist to the anxiety most researchers feel after submitting grants to an agency.  Now, along with the hours of fretting over details and verbiage in a grant application, it appears that not only great science, but the luck of the draw may be necessary to get your work funded.  The article, by David Adam, discusses the funding strategy of the Health Research Council of New Zealand, which since 2015, has implemented a strategy of awarding grants through random selection.  Although limited in scope and size (mainly these grants are on very highly speculative and potentially transformative research and awards are usually less that $150,000 NZD) was meant to promote the applicants in submitting more risky ideas that are usually submitted in traditional peer reviewed grants.

Random chance will create more openness to ideas that are not in the mainstream

–  Margit Osterloh, economist at University of Zurich

Margit also mentions that many mid-ranking applications which are never funded could benefit from such a lottery system.

The Swiss National Science Foundation (SSFS) is also experimenting with this idea of random selection.  The Health Research Council states the process in not entirely random.  A computer selects the projects at random based on a random number generator.  A panel then decides if they are a reasonably good and well written application.

Some researchers have felt this random process could help eliminate much bias that can be baked into the traditional peer review process.  However there are many who feel the current process of peer review panels are a necessary and rigorous step in the granting process, analyzing applications which would most likely have the best chances to succeed based on the rigor of the proposed science.

However Osterloh feels that the lottery idea produces a humbling effect. As Margit said

If you know you have got a grant or a publication which is selected partly randomly, then you will know very well you are not the king of the Universe

Humility in science: a refreshing idea.  However the lottery idea will not mean that scientists need not prepare a careful and well written application.  Applications that are ranked very low would not be in the lottery.  However, if one feels lucky, maybe the obscene hours of worrying about each sentence written, or that figures for preliminary data should be altered at the 11th hour before submission might be a thing of the past.

Of course if you are a lucky person.

 

 

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Real Time Coverage @BIOConvention #BIO2019: After Trump’s Drug Pricing Blueprint: What Happens Next? A View from Washington; June 3 2019 1:00 PM Philadelphia PA

Reporter: Stephen J. Williams, PhD @StephenJWillia2

 

Speaker: Dan Todd, JD

Dan Todd is the Principal of Todd Strategy, LLC, a consulting firm founded in 2014 and based in Washington, DC. He provides legislative and regulatory strategic guidance and advocacy for healthcare stakeholders impacted by federal healthcare programs.

Prior to Todd Strategy, Mr. Todd was a Senior Healthcare Counsel for the Republican staff of the Senate Finance Committee, the Committee of jurisdiction for the Medicare and Medicaid programs. His areas of responsibility for the committee included the Medicare Part B and Part D programs, which includes physician, medical device, diagnostic and biopharmaceutical issues.

Before joining the Finance Committee, Mr. Todd spent several years in the biotechnology industry, where he led policy development and government affairs strategy. He also represented his companies’ interests with major trade associations such as PhRMA and BIO before federal and state representatives, as well as with key stakeholders such as physician and patient advocacy organizations.

Dan also served as a Special Assistant in the Office of the Administrator at the Centers for Medicare & Medicaid Services (CMS), the federal agency charged with the operation of the Medicare and Medicaid programs. While at CMS, Dan worked on Medicare Part B and Part D issues during the implementation of the Medicare Modernization Act from 2003 to 2005.

Cost efficiencies were never measured.

Removing drug rebates would cost 180 billion over 10 years. CBO came up with similar estimate.  Not sure what Congress will do. It appears they will keep the rebates in.

  • House  Dems are really going after PBMs; anytime the Administration makes a proposal goes right into CBO baseline estimates;  negotiations appear to be in very early stages and estimates are up in the air
  • WH close to meet a budget cap but then broke down in next day; total confusion in DC on budget; healthcare is now held up, especially the REBATE rule; : is a shame as panel agrees cost savings would be huge
  • they had initiated a study to tie the costs of PartB to international drug prices; meant to get at disparity on international drug prices; they currently are only mulling the international price index; other option is to reform Part B;  the proposed models were brought out near 2016 elections so not much done; unified agenda;
  • most of the response of Congress relatively publicly muted; a flat fee program on biologics will have big effect on how physicians and health systems paid; very cat and mouse game in DC around drug pricing
  • administration is thinking of a PartB “inflation cap”;  committees are looking at it seriously; not a rebate;  discussion of tiering of physician payments
  • Ways and Means Cmmtte:  proposing in budget to alleve some stresses on PartB deductable amounts;
  • PartD: looking at ways to shore it up; insurers 80% taxpayers 20% responsible; insurers think it will increase premiums but others think will reduce catastrophic costs; big part of shift in spending in Part D has been this increase in catastrophic costs
  • this week they may actually move through committees on this issue; Administration trying to use the budgetary process to drive this bargain;  however there will have to be offsets so there may be delays in process

Follow or Tweet on Twitter using the following @ and # (hashtags)

@pharma_BI

@AVIVA1950

@BIOConvention

@PCPCC

#BIO2019

#patientcost

#PrimaryCare

 

Other articles on this Open Access Journal on Healthcare Costs, Payers, and Patient Care Include:

The Arnold Relman Challenge: US HealthCare Costs vs US HealthCare Outcomes

Centers for Medicare & Medicaid Services announced that the federal healthcare program will cover the costs of cancer gene tests that have been approved by the Food and Drug Administration

Trends in HealthCare Economics: Average Out-of-Pocket Costs, non-Generics and Value-Based Pricing, Amgen’s Repatha and AstraZeneca’s Access to Healthcare Policies

Can Blockchain Technology and Artificial Intelligence Cure What Ails Biomedical Research and Healthcare

Live Conference Coverage @Medcity Converge 2018 Philadelphia: Oncology Value Based Care and Patient Management

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CMS releases MACRA rule proposal: Will HHS force physicians to drop fee for service for fee for outcome?

Streamlined implementation aims to increase flexibility, decrease reporting burden for physicians

The U.S. Department of Health and Human Services unveiled a proposed ruletackling the initial implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

According to an HHS announcement accompanying the rule, the primary aim is to simplify and streamline the existing patchwork of value-based payment models that have increasingly replaced the traditional fee-for-service system via a new framework dubbed the Quality Payment Program. This structure provides doctors with two paths for compliance:

The Centers for Medicare & Medicaid Services expects most providers to opt for the MIPS track initially, according to CMS Acting Principal Deputy Administrator and Chief Medical Officer Patrick Conway, M.D., who spoke on a conference call announcing the rule.

Participation in Advanced Alternative Payment models would exempt doctors from MIPS reporting requirements while also qualifying them for financial bonuses in exchange for taking on the risks related with providing “coordinated, high-quality care,” according to CMS. The agency expects both the number of physicians participating in this track and the number of payment models available to grow over time.

CMS also reports that doctors will have the flexibility to switch among various components of the Quality Payment Program as dictated by the needs of their patients or their practices.

Opinions from around the web

In this video, Gilberg, senior vice president for the Medical Group Management Association’s Government Affairs Office, discusses CMS’ Physician Value-based Payment Modifier. In 2015, Medicare will begin applying the modifier under the physician fee schedule to various providers to show value of care.

“Cost and quality … make up the value equation, in the mind of the payer, in terms of Medicare,” said Gilberg.

In addition to explaining how the modifier works, Gilberg also highlights other quality measures facing providers under the Physician Quality Reporting System and via the EHR Incentive Programs, better known as meaningful use.

View Video at

http://www.physicianspractice.com/mgma14/understanding-medicare-value-based-payment-models

When the Medicare Access and CHIP Reauthorization Act (MACRA) legislation passed in April 2015, everyone cheered the repeal of the Sustainable Growth Rate (SGR) formula for Medicare physician payment. Now, even before the MACRA regulations are even promulgated, it’s time to pay attention because Medicare physician payments in 2019 will be impacted by their performance in 2017, just a year from now.

Other related articles

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Problem of Science Doctorate Programs

Larry H. Bernstein, MD, FCAP, Curator

LPBI

The Problem in Biomedical Education

 

Henry Bourne (UCSF)

Dr. Henry Bourne has trained graduate students and postdocs at UCSF for over 40 years. In his iBiology talk, he discusses the imminent need for change in graduate education. With time to degrees getting longer, the biomedical community needs to create experimental graduate programs to find more effective and low cost ways to train future scientists and run successful laboratories. If we don’t start looking for solutions, the future of the biomedical enterprise will grow increasingly unstable.

Watch Henry Bourne’s iBioMagazine: The Problem in Biomedical Education

Henry Bourne is Professor Emeritus and former chair of the Department of Pharmacology at the University of California – San Francisco. His research focused on trimeric G-proteins, G-protein coupled receptors, and the cellular signals responsible for polarity and direction-finding of human leukocytes. He is the author of several books including a memoir, Ambition and Delight, and has written extensively about graduate training and biomedical workforce issues. Now Dr. Bourne’s research focuses on the organization and founding of US biomedical research in the early 20th century.

Related Talks

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Peer Review and Health Care Issues

Larry H. Bernstein, MD, FCAP, Reporter

http://pharmaceuticalintelligence.com/12/1/2014/Peer-Review-and-Health-Care-Issues

(Medscape – Dec 1, 2014)

Peer-reviewed journals retracted 110 papers over the last 2 years. Nature reports the grim details in “Publishing: the peer review scam”.

When a handful of authors were caught reviewing their own

papers, it exposed weaknesses in modern publishing systems.

Editors are trying to plug the holes.

 

The Hill reports that the FDA may lift its ban on blood donations from gay men. The American Red Cross has voiced its support for lifting of the ban.

Advisers for the Food and Drug Administration (FDA) will meet this week to decide whether gay men should be allowed to donate blood, the agency’s biggest step yet toward changing the 30-year-old policy.

If the FDA accepts the recommendation, it would roll back a policy that has been under strong pressure from LGBT advocates and some members of Congress for more than four years.

“We’ve got the ball rolling. I feel like this is a tide-turning vote,” said Ryan James Yezak, an LGBT activist who founded the National Gay Blood Drive and will speak at the meeting. “There’s been a lot of feet dragging and I think they’re realizing it now.”

Groups such as the American Red Cross and America’s Blood Centers also voiced support of the policy change this month, calling the ban “medically and scientifically unwarranted.”

The FDA will use the group’s recommendation to decide whether to change the policy.

“Following deliberations taking into consideration the available evidence, the FDA will issue revised guidance, if appropriate,” FDA spokeswoman Jennifer Rodriguez wrote in a statement.

This reporter has more than 20 years of Blood Bank experience.  The factor in favor of the recommendation is that the HIV 1/2 and other testing is accurate enough to leave the question of donor lifestyle irrelevant.  However, it remains to be seen whether the testing turnaround time is sufficient to prevent the release of units that may be contaminated prior to transfusion, which is problematic for platelets, that have short expirations. In all cases of donor infection, regardless of whether units are released, a finding leads to not releasing the product or to recall.

 

Democrats made a strategic mistake by passing the Affordable Care Act, Sen. Charles Schumer (N.Y.), the third-ranking member of the Senate Democratic leadership, said Tuesday.

Schumer says Democrats “blew the opportunity the American people gave them” in the 2008 elections, a Democratic landslide, by focusing on healthcare reform instead of legislation to boost the middle class.

“After passing the stimulus, Democrats should have continued to propose middle class-oriented programs and built on the partial success of the stimulus,” he said in a speech at the National Press Club.

He said the plight of uninsured Americans caused by “unfair insurance company practices” needed to be addressed, but it wasn’t the change that people wanted when they elected Barack Obama as president.

“Americans were crying out for an end to the recession, for better wages and more jobs; not for changes in their healthcare,” he said.

This reader finds the observation by Senator Schumer very perceptive, regardless of whether the observation in hindsight might have had a different political outcome.  It has been noted that President Obama had a lot on his plate.  Moreover, we have not seen such a poor record of legislation in my lifetime.  There are underlying issues of worldview of elected officials that also contribute to the events.

 

THE PEER-REVIEW SCAM

BY CAT FERGUSON, ADAM MARCUS AND IVAN ORANSKY

N AT U R E |  2 7 N O V  2 0 1 4; VO L 5 1 5 : 480-82.

Most journal editors know how much effort it takes to persuade busy researchers to review a paper. That is why the editor of The Journal of Enzyme Inhibition and Medicinal Chemistry was puzzled by the reviews for manuscripts by one author — Hyung-In Moon, a medicinal-plant researcher then at Dongguk University in Gyeongju, South Korea.

The reviews themselves were not remarkable: mostly favourable, with some suggestions about how to improve the papers. What was unusual was how quickly they were completed — often within 24 hours. The turnaround was a little too fast, and Claudiu Supuran, the journal’s editor-in-chief, started to become suspicious.

In 2012, he confronted Moon, who readily admitted that the reviews had come in so quickly because he had written many of them himself. The deception had not been hard to set up. Supuran’s journal and several others published by Informa Healthcare in London
invite authors to suggest potential reviewers for their papers. So Moon provided names, sometimes of real scientists and sometimes pseudonyms, often with bogus e-mail addresses that would go directly to him or his colleagues. His confession led to the retraction of 28 papers by several Informa journals, and the resignation of an editor.

Moon’s was not an isolated case. In the past 2 years, journals have been forced to retract more than 110 papers in at least 6 instances of peer-review.

PEER-REVIEW RING
Moon’s case is by no means the most spectacular instance of peer-review rigging in recent years. That honour goes to a case that came to light in May 2013, when Ali Nayfeh, then editor-in-chief of the Journal of Vibration and Control, received some troubling news. An author who had submitted a paper to the journal told Nayfeh that he had received e-mails about it from two people claiming to be reviewers. Reviewers do not normally have direct contact with authors, and — strangely — the e-mails came from generic-looking Gmail accounts rather than from the professional institutional accounts that many academics use (see ‘Red flags in review’).
Nayfeh alerted SAGE, the company in Thousand Oaks, California, that publishes the journal. The editors there e-mailed both the Gmail addresses provided by the tipster, and the institutional addresses of the authors whose names had been used, asking for proof of identity and a list of their publications.ew rigging. What all these cases had in common was that researchers exploited vulnerabilities in the publishers’ computerized systems to dupe editors into accepting manuscripts, often by doing their own reviews. The cases involved publishing behemoths Elsevier, Springer, Taylor & Francis, SAGE and Wiley, as well as Informa, at least one of the systems — could make researchers vulnerable to even more serious identity theft. “For a piece of software that’s used by hundreds of thousands of academics worldwide, it really is appalling,” says Mark Dingemanse, a linguist at the Max Planck Institute for Psycholinguistics in Nijmegen, the Netherlands, who has used some of these programs to publish and review papers.

A 14-month investigation that came to involve about 20 people from SAGE’s editorial, legal and production departments. It showed that the Gmail addresses were each linked to accounts with Thomson Reuters’ ScholarOne, a publication-management system used by SAGE and several other publishers, including Informa. Editors were able to track every paper that the person or people behind these accounts had allegedly written or reviewed, says SAGE spokesperson Camille Gamboa. They also checked the wording of reviews, the details of author-nominated reviewers, reference lists and the turnaround time for reviews (in some cases, only a few minutes). This helped the investigators to ferret out further suspicious-looking accounts; they eventually found 130.

SAGE investigators came to realize that authors were both reviewing and citing each other at an anomalous rate. Eventually, 60 articles were found to have evidence of peer-review tampering, involvement in the citation ring or both. “Due to the serious nature of the findings, we wanted to ensure we had researched all avenues as carefully as possible before contacting any of the authors and reviewers,” says Gamboa. When the dust had settled, it turned out that there was one author in the centre of the ring: Peter Chen, an engineer then at the National Pingtung University of Education (NPUE) in Taiwan, who was a co-author on practically all of the papers in question.

PASSWORD LOOPHOLE
Moon and Chen both exploited a feature of ScholarOne’s automated processes. When a reviewer is invited to read a paper, he or she is sent an e-mail with login information. If that communication goes to a fake e-mail account, the recipient can sign into the system under whatever name was initially submitted, with no additional identity verification. Jasper Simons, vice-president of product and market strategy for Thomson Reuters in Charlottesville, Virginia, says that ScholarOne is a respected peer-review system and that it is the responsibility of journals and their editorial teams to invite properly qualified reviewers for their papers.

ScholarOne is not the only publishing system with vulnerabilities. Editorial Manager, built by Aries Systems in North Andover, Massachusetts, is used by many societies and publishers, including Springer and PLOS. The American Association for the Advancement of Science in Washington DC uses a system developed in-house for its journals Science, Science Translational Medicine and Science Signaling, but its open-access offering, Science Advances, uses Editorial Manager. Elsevier, based in Amsterdam, uses a branded version of the same product, called the Elsevier Editorial System.

Usually, editors in the United States and Europe know the scientific community in those regions well enough to catch potential conflicts of interest between authors and reviewers. But Lindsay says that Western editors can find this harder with authors from Asia — “where often none of us knows the suggested reviewers”. In these cases, the journal insists on at least one independent reviewer, identified and invited by the editors.

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2:15PM 11/13/2014 – 10th Annual Personalized Medicine Conference at the Harvard Medical School, Boston

REAL TIME Coverage of this Conference by Dr. Aviva Lev-Ari, PhD, RN – Director and Founder of LEADERS in PHARMACEUTICAL BUSINESS INTELLIGENCE, Boston http://pharmaceuticalintelligence.com

 

 

2:15 p.m. Panel Discussion Reimbursement/Regulation

 

Reimbursement and Regulation

     Moderator:

Sheila D. Walcoff, J.D.
CEO and Founder, Goldbug Strategies, LLC

Panelists:

2. Catalina Lopez Correa, M.D., Ph.D.
Vice President/CSO, Scientific Affairs
Génome Québec

1. Michael Kolodziej, M.D.
National Medical Director for Oncology Strategies, Aetna

Clinical Utility Test is done cheap the drug used as therapeutics is $10,000 – without knowing if it will work or not

3. Bruce Quinn, M.D., Ph.D.
Senior Health Policy Specialist
Foley Hoag LLP

It is a whole ecosystem,

1. CMS – ACA

2. On diagnostics: clinical utility (six questions), clinical validity, analytical

$50 test kit from Abbott, 20,000 patients – $1 million market for test, Drug: $100,000 = $1 Billion for Pharma

Test coverage by Insurance:
  • If Patient sign Risks are known, Physician is educated, Patient is educated by Physician
  • Participation in Registry — test is covered
  • making information actionable to the Consumer

See more at: http://personalizedmedicine.partners.org/Education/Personalized-Medicine-Conference/Program.aspx#sthash.qGbGZXXf.dpuf

 

@HarvardPMConf

#PMConf

@SachsAssociates

@GenomeQuebec

@clopezcorrea

@Aetna (for Dr. Kolodziej)

 

@FoleyHoag (for Bruce Quinn)

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The Arnold Relman Challenge: US HealthCare Costs vs US HealthCare Outcomes

Reviewer and Curator: Larry H. Bernstein, MD, FCAP and

Curator: Aviva Lev-Ari, PhD, RN

 

 

 

About Arnold Relman


 

Arnold Relman (1923–2014) was Professor Emeritus of Medicine and Social Medicine at Harvard Medical School and a contributor of many articles and essays to The New York Review. Marcia Angell is a Senior Lecturer in Social Medicine at Harvard Medical School. Arnold Relman was her husband.

 

 SOURCE

http://www.nybooks.com/contributors/arnold-relman/

 

This is a posting of Relman’s just published review of the new publication  by Elizabeth H. Bradley and Lauren A. Taylor, in the prestigious Public Affairs (AUGUST 14, 2014 ISSUE)

The American Health Care Paradox: Why Spending More Is Getting Us Less

The US spends much more per person on medical care than any other country. And yet,

  • by commonly accepted measures of the quality of its national health system, it ranks only in the middle of the other advanced countries

belonging to the Organization for Economic Cooperation and Development (OECD).

Elizabeth Bradley and Lauren Taylor argue that

  • this “American health care paradox” is resolved when expenditures on other social services that undoubtedly contribute to improved national and personal health are taken into account.

These expenditures include support for such services as housing, education, maternal and child care, disease prevention, nutrition, environmental safety, and unemployment benefits. They also involve subsidies for the very poor, the disabled, and the elderly.

  • The US spends a much smaller percentage of its GDP on these programs than other OECD countries. Thus,

when these expenditures are added to what is spent for medical care, the total, expressed as a percentage of GDP, places our country in the middle of the other OECD countries.

That is consistent with the ranking of our health care system, and so the authors claim

  • the “paradox” is resolved.

To increase the quality of our health care system to the level now achieved by France, Germany, Switzerland, and Sweden,

  1. we would need not only to expand our investment in other social services, but also
  2. to practice what Bradley and Taylor call “a more holistic approach” to the medical care of each patient.

That means more attention to preventing illness and to modifying patients’ behavior in ways that promote health.

Their argument has intuitive appeal, made even stronger by the warm endorsement given by Dr. Harvey Fineberg, outgoing president of the Institute of Medicine (IOM) of the National Academy of Sciences, in the foreword he has written for the book, and by recent reports from committees of the IOM. It is generally agreed that

  • poor and disadvantaged populations, such as teenaged single mothers and their children, or
  • unemployed, uneducated, and ill-housed minorities,

suffer relatively poor health.

So it might seem entirely reasonable to conclude with the authors

  • that the answer to what ails our national health system lies in paying more attention to
  • social welfare programs, preventive measures, and education.

Relman dissatisfied:

Their argument is made more attractive by their clear prose and by their many helpful descriptions and historical explanations of US health care policy. Nevertheless, it does not persuade me, and
I don’t believe it will satisfy many critics who look closely at the issues.

In the first place, Bradley and Taylor pay insufficient attention to the great value Americans place on

  • the immediate diagnosis and treatment of personal illnesses and injuries, as compared with
  • public measures to enhance national health such as disease prevention and nutrition.

In the US, prompt medical care is given

  • far greater priority than improved public health, and
  • it commands much greater resources.

Research on personal medical care is also given a high priority, but  (political reality)

  • new large investments in social welfare programs are not a legislative or political necessity now or in the foreseeable future,
  • so long as conservative Republican opposition to governmental spending of this sort persists.

Moreover, the long-range economic benefits of social welfare and preventive measures are generally misunderstood. For example,

  • prevention of heart attacks in early life through exercise, better diet, and elimination of smoking would extend life into later decades.

That is certainly a desirable goal, but then the multiple

  • incurable disabilities of old age and the need for long-term care after retirement begin to increase total health costs.

Second, the evidence presented by Bradley and Taylor to support their claim of resolving the American health care “paradox” is not as strong as their rhetoric implies. This is well illustrated by their Figure 1.3, which shows

  • aggregate health care and social welfare spending in OECD countries for 2007, and

is supposed to demonstrate that when all costs are considered,

  • the US is no longer as inferior to European countries as many have claimed.

The figure shows that American total expenditures place it just about

  • in the middle of all the countries shown, in accord with the quality of its health care system.

Nevertheless, while total expenditures on health and social welfare in France, Sweden, Switzerland, and Germany exceed those in the US (which would be expected given their generally superior health systems), the figure shows

  • total expenditures for Canada, New Zealand, and Australia to be well below those in the US, even though
  • these countries are widely acknowledged to have better health systems than the US.
  • Similarly, total expenditures in Norway are roughly equal to those in the US, although the Norwegian national health system is generally recognized to be of much higher quality.

Their Table 4.1 (see below) also illustrates this lack of congruence between health care outcomes such as

  • infant mortality and life expectancy in selected countries and
  • their ranking in total expenditures (as shown in Figure 1.3).

In short, total expenditures (social welfare plus medical care) do not seem to be as consistently related to health outcomes as Bradley and Taylor would have us believe. But they are certainly correct in arguing that in general, more attention to welfare programs would improve the quality of life in the US.

American Health Care Paradox

American Health Care Paradox

My final reason for skepticism is the authors’ dependence on personal interviews with

  • a selected and limited number of sources for much of their original data on attitudes about health care.

Bradley, the senior author, is a professor of public health at Yale; Taylor was trained in public health and medical ethics. They would therefore be expected to use

  • the methods of descriptive social science in developing their arguments.

They state that they conducted interviews with “more than eighty health and social policy experts, researchers, practitioners, and consumers.” Anyone who has been involved in such interviews knows how variably the results can be interpreted. Bradley and Taylor were commendably diligent in recording and transcribing their interviews, but

  1. they took a relatively small sample, and
  2. much of it was limited to Scandinavian countries,
  3. which are very different from the US, for example
  • in their levels of taxation and their guarantees of medical care and public welfare generally.

As a result, the reader can never be quite sure how comprehensive and balanced a picture this book presents of the American health system, when compared with other OECD countries.

Nevertheless, it is hard to deny two basic and fairly obvious points the authors want to make.

First, inadequate social services in the US contribute to our poor national health.

Second, adding welfare expenditures to those of medical care does help to some extent to resolve the American “paradox” of high medical expenditures and relatively poor health outcomes. But the resolution

  • is not as complete or convincing as claimed, and
  • there is no evidence that expanding welfare programs,

as Bradley and Taylor argue,

  • would more effectively improve national health than directly reforming the payment and organization of medical services.

In fact, the evidence suggests the contrary. The US currently

  1. wastes vastly more resources on a dysfunctional medical care system than it would ever consider spending on social welfare, so
  2. the likelihood of bettering national health through major expansion of welfare programs is remote.

As difficult as it may be, trying to reform the medical system is a better bet;

  • this would free up resources that could be used to improve other social services.

In addition, most Americans will inevitably become ill or injured at some time in their lives, no matter how adequate the US social services, and for them at that time,

  • a good medical care system is essential. Therefore, it makes sense to consider

how reforming the payment and organization of medical care could reduce the heavy burden of

  • unnecessary waste, fraud, and bureaucratic overhead on our medical care system.

This looks like the best way to begin to resolve this book’s “paradox.”

There is widespread and growing recognition that the best way of improving the delivery of medical service and reducing its costs would be

  • a shift away from fee-for-service payment for medical care after it is received
  • to prepayment for comprehensive care.

The Affordable Care Act (ACA) attempts to move in this direction by establishing “accountable care organizations” that are paid

  1. small bonuses for bettering the treatment of Medicare patients (as defined by government guidelines). However,
  2. these organizations work mainly through private insurance plans, which, despite these intentions,
  3. still pay for the more expensive special procedures and services by fee-for-service.

The ACA is therefore not likely to control national health expenditures in the long term. Government actuaries and budget officers

  • predict that these expenditures will continue to rise at an unsustainable rate unless there is major reform.

To achieve better quality at lower costs, I believe we will have to progress beyond the ACA, and

  • the needed reforms will require more participation by the medical profession.

Physicians will have to join medical groups that accept a single payment for comprehensive care and

  • are willing to be paid mainly by salaries rather than the fees they bill and collect.

Although insurance companies will lobby hard to maintain their power, such a system does not need private insurance plans; it would be much better without them. Vast overhead expenditures would be saved if payment were to come from a single tax-supported agency. That’s why single-payer plans are getting increasing attention these days.

Recent changes in the medical care system have created forces that

  • both favor and inhibit the development of a single-payer arrangement.

Physicians who would formerly have started practicing solo or in small partnerships are rapidly becoming employees of large groups

  • in order to avoid the daunting economic risks of managing their own practices. Unfortunately,
  • most of these large groups are owned by hospitals that are primarily interested in furthering their own financial goals.

They use their physician employees to generate

  • more admissions and greater use of hospital-based procedures.

They want to defend the status quo and their own income, rather than press for reform.

An awakening interest in political affairs and a recent trend toward a preference for Democratic political candidates suggest that

  • the medical profession may soon wish to turn national health policy in a different direction.
    (this is a period of transition between generations)

No large-scale health reform is likely without broad support by physicians, so

  • their political awakening may be the most important factor in bringing about major change.

A united profession could influence the views of its patients, and this in turn could

  • influence legislators even more than the money of an army of lobbyists.
    (army of lobbyists is supported by an exhorbitant wealth disproportion unknown in history, or at least since reconstruction)

Legislators need votes most of all, and patients are the voters they need.
(assumes that patients are a homogeneous group; and thee is no difference between rural and municipalities)

Another recent change that may favor the arrival of single-payer health care is

  • the rapid increase in the number of women in active medical practice.

They will soon equal or outnumber men. Women physicians seem to be more interested in the

  • social services that are available in multispecialty medical group practices,
  • among them adequate child care and parental leaves.
  • They want to share practice responsibilities, and
  • they tend to have more liberal political views than most men.

This major demographic shift in the physician population, as well as its political movement toward more progressive policies, might put the profession in the forefront of health reform instead of the sidelines where it has usually been.

Without leadership by physicians, it is unlikely that we will see any major change in the system for payment and organization of medical care within the next decade or two. And

  1. without such change, the future of the American health system is bleak;
  2. either market forces or intrusive government regulations (or both)
  3. will control how physicians practice their profession.

Financial responsibility for health care coverage will increasingly fall on individuals, because

  • ‘neither government nor business employers will be able to afford the rising costs.

The greatest opportunities for reducing unnecessary costs and improving the quality of the American health system are to be found in

  • reforming the payment and organization of medical care
  • rather than in expanding social welfare programs.

Although these programs are of enormous importance for many reasons not only related to health, and well worth expanding, they cannot substitute for improving the effectiveness and efficiency of medical care for the sick and injured. That is where we are likely to see the most hopeful future development.

Epicrisis:

In my reading of Arnold Relman, I find that there is validity and unrealistic assumptions in his criticism.  It will take a generational change in the profession, which is currently avolving and making some of the changes he notes.

1. There is at least two generations of physicians who entered the profession in the post WWII era, when the Flexner model was in full force, and exemplified by William Osler, the Oslerian model..

Over a century ago, the Quaker merchant Johns Hopkins did more than provide in his will for the construction of a university, a hospital and a medical school.  He provided a vision of a unique university-based health center, one with a vital mission: to create a learning, training and caring environment where the quest for new knowledge would continuously yield more effective and compassionate care for all. Today, after a century of progress that even its founder could not have envisioned, the quest for new knowledge leading to better health care remains the defining mission of Johns Hopkins Medicine.

The original faculty of The Johns Hopkins University School of Medicine, including such pioneers of modern medicine as William H. Welch, William S. Halsted, William Osler and Howard A. Kelly, created a revolutionary new medical curriculum that integrated a rigorous program of basic science education with intensive clinical mentoring. With the opening of The Johns Hopkins Hospital in 1889, followed four years later by the School of Medicine, these founding physicians ushered in a new era in medical education marked by rigid entrance requirements for students, a vastly upgraded curriculum with emphasis on the scientific method, the incorporation of bedside teaching and laboratory research as part of the instruction, and integration of the School of Medicine with the Hospital through joint appointments. 

Notable faculty have included:  John Jacob Abel – Pharmacologist, John Shaw Billings – Civil War surgeon, pioneering leader in hygiene, Alfred Blalock – Developed field of cardiac surgery, Max Brödel – Acclaimed medical illustrator, William R. Brody – Radiologist, President of the Salk Institute, former President of Johns Hopkins UniversityBen Carson – Pediatric Neurosurgeon, awarded the Presidential Medal of Freedom, Denton Cooley – Renowned Cardiovascular surgeon, Harvey Cushing – Father of modern neurosurgery, Catherine Clarke Fenselau – Biochemist and mass spectrometrist,  William Halsted – Father of modern surgery, Leo Kanner – Father of child psychiatry, Albert L. Lehninger – Biochemist, Victor McKusick – Developed field of medical genetics, William Osler – Father of modern medicine, Wilder Penfield – Pioneer of epilepsy neurosurgery; developed the cortical homunculusPeter Pronovost – Anesthesiologst, MacArthur Fellow, Julie A. Freischlag, M.D., the director of the Department of Surgery

2. The large inroads in genetics, genomics and the Human Genome Project attests to the incredible growth in the knowledge base required from which physicians make decisions.  But despite the huge competition for entry, a shortage of primary care physicians, and a brain drain for less developed countries, the multicultural profession has had to adjust to a multicultural society into which it has to be integrated.  As much as a half century ago, candidates competed for entry on the basis of correlation with their undergraduate performance in organic chemistry.

3.  A half century ago, the poor could obtain emergency room care as a primary root of admission, which was likely late in the progression of the illness. This was not then, and is not now an acceptable system.

4. When Medicare came in, physicians accepted it as a reliable source for patients.  The same had to be true for hospitals.

5. Managed care began with the building of the Golden Gate Bridge, finished early, and supported by physicians employed by Henry Kaiser. This became a model taken seriously by Eastman Kodak and IBM.

6. It appears be be difficult to predict what will be in place a decade from now.  The Republican party is in default mode, and the Supreme Court has appointments that have not earned a lifetime appointment.

7.  I can’t see how the reorganizing of medicine, even with NPs and PAs can deal with the healthcare burden without attending to..

  • children in broken families
  • a substantial population in prison confinement
  • dealing with white collar corruption
  • supporting a minimum standard of living
  • an improvement in education at a very young age (with parental involvement)
  • a population that is more than 70% literate

8. There is a young physician population that has a dream and life style that is larger than the ALL MEDICINE and early to rise, late to bed than I have seen for so many years, and compassion has become important, as we don’t have all the answers, or all of the control.

 

 

 

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