Thursday, October 29, 2015

Universal Payer.....Are we on the way?

The Affordable Care Act catalyzed the free-market health system into a flurry of mergers and acquisitions   among some already very big insurance carriers.  These companies are risk averse, and have been required to expand coverage to previously uninsured and people who have not had medical care. The incidence of neglected conditions is higher than that in the insured population.

Premiums are rising due to the increased risk and utilization.  The health system is not yet in equilibrium, and may not be for several more years. The mergers of companies increases their underwriting assets, as well as decreases competition.

On the care delivery side of the equation the additional cost of administering accountable care organizations, meeting HEDIS criteria, and the loss of efficiency of improperly designed HIT (read EHR) is increasing practice overhead driving further mergers of medical practices, and health systems.

The same is true of pharmaceutical retailers and manufacturers.The pricing of drugs is unstable, as well and opportunities exist for profiteering while the going is good.  Witness this article taken from the  Journal of the American Medical Association,

Options to Promote Competitive Generics Markets in the United States

Clay P. Wiske, MPhil, MBA1,2; Oluwatobi A. Ogbechie, MD, MBA2,3; Kevin A. Schulman, MD2,4
[-] Author Affiliations
1Warren Alpert Medical School of Brown University, Providence, Rhode Island
2Harvard Business School, Boston, Massachusetts
3Harvard Medical School, Boston, Massachusetts
4Duke Clinical Research Institute and Department of Medicine, Duke University School of Medicine, Durham, North Carolina 
JAMA. Published online October 29, 2015. doi:10.1001/jama.2015.13498

"In August, the price of the 62-year-old drug pyrimethamine (Daraprim), used to treat many potentially fatal parasitic infections, was increased practically overnight from $14 to $750 per tablet. This colossal increase attracted renewed attention to generic pharmaceutical price spikes, prompting public outrage and a new round of proposals to address this issue. Over the past few years, increasing drug shortages and price spikes have affected generic drugs, which now account for 86% of prescriptions and 29% of pharmaceutical spending.1 A stable supply of affordable generic pharmaceuticals is crucial to improve health care access and appropriate utilization for many Americans."

 A 2014 report from the US Government Accountability Office found that the number of active drug shortages increased steadily from 154 in 2007 to 456 in 2012, and the majority of the affected drugs were generic.2 According to a recent Senate subcommittee investigation, many generic drugs prices have increased substantially as producers have left the market; for example, the price of albuterol sulfate tablets, used for asthma and other lung diseases, increased 4014% between October 2013 and April 2014 from $11 to $434.3 These generic drug shortages and price spikes are adverse outcomes of a malfunctioning marketplace.

Some solutions have been offered


Three potential business strategies—restricted market entry, long-term contracting, and creation of a futures market—could stabilize the generics drug market, but each has strengths and limitations. Paradoxically, for free-market advocates, these proposals all entail efforts that appear to be somewhat anticompetitive. The intent is to create a generics market that is economically viable for several firms to supply each product in the market. This result will likely lead to the most stable market over time.

Two features of the US generic drug market make it more prone to price swings and shortages than other commodity markets. First, entry into the generic drug market is restricted, including financial barriers (the cost of product formulation, quality assurance, and bioequivalence testing) and a time barrier due to the need for abbreviated clinical testing and the uncertainty of the Abbreviated New Drug Application (ANDA) review cycle. Second, again in contrast to more efficient commodity markets, there are barriers to the substitution of other products for a given generic drug molecule.

The economics of the generic drug market are driven by the opportunity for 180 days of market exclusivity for the first generic product on the market. These products are available at prices only slightly reduced from those of the originator products. Generic manufacturers may enter the market after 180 days in the hope of a substantial financial return in the short period of time before the price of the product declines. Firms take a calculated risk in financing bioequivalence studies and in entering the marketplace without knowing how many competitors will enter the market nor how quickly the price of the product will decline. As other firms enter the market and the price of a product approaches its marginal cost, the incentive to remain a supplier diminishes.4 At that time, firms make decisions about exiting the market without knowledge of the actions of other firms. Eventually, exit of enough firms supplying a particular product can lead to substantial price increases as the remaining firms operate with little competition, or drug shortages if remaining firms lack the capacity to supply the entire market. These are the drug shortages and price increases observed by Congress.

Option 1: Restrict Market Entry
Option 2: Encourage Long-term Contracts From Wholesalers
Option 3: Create a Futures Market


Corresponding Author: Kevin A. Schulman, MD, Duke Clinical Research Institute, PO Box 17969, Durham, NC 27715 (
Published Online: October 29, 2015. doi:10.1001/jama.2015.13498.
Conflict of Interest Disclosures: All authors have completed and submitted the ICMJE Form for Disclosure of Potential Conflicts of Interest. Dr Schulman reports receiving honoraria from McKesson and Cardinal Health; consulting fees from Genentech, Novartis, sanofi-aventis, and Cytokinetics; and holding stock in Alnylam Pharmaceuticals. No other disclosures were reported.
Additional Contributions: This article was developed in collaboration with Aaron S. Kesselheim, MD, JD, MPH (Brigham and Women’s Hospital). He received no compensation for her contribution.

Walgreens to buy rival Rite Aid for $9.4 billion, creating drugstore giant - LA Times

The proposed deal follows a wave of mergers elsewhere in the healthcare industry, with insurers, hospital operators and pharmaceutical companies all combining to gain more leverage with suppliers and cut costs as the Affordable Care Act and other issues roil the outlook for revenues and profits.
In July, for instance, Anthem Inc. reached a $54-billion deal to buy rival Cigna Corp. and create the nation's largest health insurer.
But some observers questioned how much the public is being helped by having fewer players in each of the health industry's major industries.
Companies can make the argument that a larger company is necessary to negotiate better deals, but that might not translate to a boon for consumers, said Carmen Balber, executive director of Consumer Watchdog.
“It's fair to assume that drug prices will increase for consumers because of this merger,” Balber said. “There are less companies negotiating with the pharmacy managers, and there are less companies negotiating with the pharmaceutical companies.”
In downtown Los Angeles, where Walgreens and Rite Aid stores face off across the intersection of 7th and South Hope streets, Jeffrey Portnoy said his only worry about Walgreens buying Rite Aid was the effect on drug prices.He also said there would likely be a review of the stores' overlapping coverage areas and that the Department of Justice would require them to shed some stores in certain regions, including California.
Walgreens overall has about 13,100 stores in 11 countries, and it operates a leading pharmaceutical wholesale and distribution network with sales in 19 countries. The company employs about 370,000 people. Rite Aid has about 89,000 employees.

Walgreens to buy rival Rite Aid for $9.4 billion, creating drugstore giant - LA Times

Some Health Plans Have No In-Network Doctors In Key Specialties -

Some Health Plans Have No In-Network Doctors In Key Specialties -

HealthTap Goes Global Introducing HOPESTM, the First and Only Health Operating System™ for Hospitals, Clinics, and Community-Based Programs Worldwide | Business Wire

HealthTap Goes Global Introducing HOPESTM, the First and Only Health Operating System™ for Hospitals, Clinics, and Community-Based Programs Worldwide | Business Wire

Tuesday, October 27, 2015

Costs for Dementia Care Far Exceeding Other Diseases, Study Finds - The New York Times

Three diseases, leading killers of Americans, often involve long periods of decline before death. Two of them — heart disease and cancer — usually require expensive drugs, surgeries and hospitalizations. The third, dementia, has no effective treatments to slow its course.
So when a group of researchers asked which of these diseases involved the greatest health care costs in the last five years of life, the answer they found might seem surprising. The most expensive, by far, was dementia.
The study looked at patients on Medicare. The average total cost of care for a person with dementia over those five years was $287,038. For a patient who died of heart disease it was $175,136. For a cancer patient it was $173,383. Medicare paid almost the same amount for patients with each of those diseases — close to $100,000 — but dementia patients had many more expenses that were not covered.

On average, the out-of-pocket cost for a patient with dementia was $61,522 — more than 80 percent higher than the cost for someone with heart disease or cancer. The reason is that dementia patients need caregivers to watch them, help with basic activities like eating, dressing and bathing, and provide constant supervision to make sure they do not wander off or harm themselves. None of those costs were covered by Medicare.


John Rakis visiting Naomi Wallace, his mother-in-law. Mr. Rakis spent more than $189,000 in less than two years for caregivers and other expenses.CreditSam Hodgson for The New York Times

For many families, the cost of caring for a dementia patient often “consumed almost their entire household wealth,” said Dr. Amy S. Kelley, a geriatrician at Icahn School of Medicine at Mt. Sinai in New York and the lead author of the paper published on Monday in the Annals of Internal Medicine.
“It’s stunning that people who start out with the least end up with even less,” said Dr. Kenneth Covinsky, a geriatrician at the University of California in San Francisco. “It’s scary. And they haven’t even counted some of the costs, like the daughter who gave up time from work and is losing part of her retirement and her children’s college fund.”
Dr. Diane E. Meier, a professor of geriatrics and palliative care at Mount Sinai Hospital, said most families are unprepared for the financial burden of dementia, assuming Medicare will pick up most costs.
“What patients and their families don’t realize is that they are on their own,” Dr. Meier said.

Everything gets complicated when a person has dementia, noted Dr. Christine K. Cassel, a geriatrician and chief executive of the National Quality Forum.
She described a familiar situation: If a dementia patient in a nursing home gets a fever, the staff members say, “I can’t handle it” and call 911, she said. The patient lands in the hospital. There, patients with dementia tend to have complications — they get delirious and confused, fall out of bed and break a bone, or they choke on their food. Medical costs soar.


Costs for Dementia Care Far Exceeding Other Diseases, Study Finds - The New York Times

Behavioral Medicine in your Community

If you are interested in improving care for homeless individuals or reducing the number of incarcerated people, watch these outstanding presentations

Assisted Outpatient Treatment: The Nevada County Experience from Treatment Advocacy Center on Vimeo.

How can you help in making this a reality ?

Pharmacies also to participate in Pay for Performance

Express Scripts- New Program to Contact and Predict Patients Who May Not Be Taking Their Medicine Based On Ingenix Algorithms–We Want the Revenue Please Don’t Stop - Medical Quack

Friday, October 23, 2015

Judge Bars DOJ From Interfering With Calif. Medical Marijuana Laws - California Healthline

On Monday, a federal court in California ruled that federal authorities cannot close medical marijuana dispensaries that operate within the boundaries of state law, Time reports (White, Time, 10/20).

Details of Case
At issue in the case was the Drug Enforcement Administration's interpretation of the Rohrabacher-Farr amendment to last year's federal government spending bill.
Under the amendment, which lists the states with medical marijuana laws, the Department of Justice cannot use federal funds to stop such states from implementing their own laws to "authorize the use, distribution, possession or cultivation of medical marijuana" (Ingraham, "Wonkblog,"Washington Post, 10/20). However, DOJ interpreted the amendment to mean they were only barred from taking action against the state, not medical marijuana-related businesses and individuals who deal with the implementation of such laws, according to a leaked memo.
According to Time, DEA's enforcement resulted in the closure of many California dispensaries.

Details of Ruling

In his decision, U.S. District Judge Charles Breyer ruled that DOJ cannot use federal money to interfere with state medical marijuana laws and practices (Time, 10/20).
Breyer said the federal government's interpretation of the amendment "defies language and logic" and was "at odds with fundamental notions of the rule of law."
The decision could affect DEA's ability to prosecute future federal medical marijuana cases ("Wonkblog," Washington Post, 10/20).

Judge Bars DOJ From Interfering With Calif. Medical Marijuana Laws - California Healthline

Thursday, October 22, 2015

Fear itself | The Economist

PTSD   A term which has become common amongst military and veterans returning from Middle East assignment and former Vietnames and Korean War Veterans.

A mental illness caused by trauma may be one of the first to be understood in physical terms

PTSD, originally recognized during and after WWII as 'battle fatigue" It labels a constellation of signs and symptoms which have been studied with modern neuroscience.

Accounts of debilitating fear after trauma date back to the Trojan wars. In the 19th century survivors of train crashes were diagnosed with “railway spine” because doctors thought their hysteria was caused by compression of the backbone. In the first world war it was known as shell shock, soldier’s heart or battle fatigue. Not until soldiers returned from the Vietnam war with the same symptoms of hyper-vigilance, flashbacks and nightmares was the disorder truly taken seriously. In 1980 an umbrella term was coined: post-traumatic stress disorder (PTSD).
Attitudes are now quite different from those that prevailed during the second world war, when George Patton, an American general, threatened to court-martial men with battle fatigue. And research is progressing swiftly. A remarkable amount has been discovered about the causes of PTSD and how to treat it—which is welcome, because another discovery is how common it is.
 According to Charles Marmar, a psychiatrist at New York University’s medical centre, it may be the first psychiatric disorder “where we crack the mind-brain connections”.
Neural research is helping to reveal how people get stuck in a state of fear. The amygdalae, a pair of almond-sized regions deep in the brain, are the main orchestrators of fear, reading incoming signals such as smells and sounds and sending messages to other bits of the brain, which filter the signals before reacting. In someone with PTSD the filters struggle to distinguish between real threats and those that can safely be ignored.
The brain of a healthy person given cause to panic will tell the body to activate various reactions, including releasing adrenalin. A person’s heart rate will increase and they will have a strong urge to fight or flee. Once back to safety, symptoms subside and all that remains is a bad memory. A woman assaulted in a noisy bar may react fearfully to the sound of clinking glasses for a few weeks, but over time, in what is called “fear extinction”, the positive association of celebrating with friends will outweigh negative ones. The more often people receive such reminders without suffering a disaster, the more likely the fear is to dissipate—which is why it is important not to hide away after a trauma.  
Retraining the brain
When this mechanism fails, the result is PTSD. A soldier returning from war may continue to freeze and have debilitating flashbacks when anything reminds him of combat. One ex-soldier tells of “freaking out” every time his wife baked: it turned out that the smell of almonds evoked Semtex, an explosive. People who were abused as children may suffer when it is dark, because such abuse often happens at night.
Studies of twins suggest that susceptibility to PTSD is about 30% genetic. Researchers in the new field of epigenetics—the study of how external factors influence the way the instructions written in genes are expressed in organisms—have produced some evidence to suggest that stress might be passed on to offspring.

An exciting recent development is the discovery of markers that show differences between the brains, genes and even blood of people with and without PTSD. When a sufferer sees a picture of a frightened face, the amygdala shows a heightened response. At the same time the prefrontal cortex, which regulates fear, is suppressed. Researchers are hot on the trail of chemicals that could indicate PTSD in a blood test, says Kerry Ressler, a molecular scientist and psychiatrist at McLean Hospital of Harvard Medical School.  
Treatments mostly aim to retrain the brain’s fear response. Many patients are given cognitive therapy, which teaches them to think differently about what happened and trains them to cope with triggers. Debra Kaysen of the University of Washington says severe symptoms recede in about four out of five patients following a dozen or so sessions. Other patients are given exposure therapy, in which they are confronted with the feared stimuli. Adults may be asked to describe a traumatic event in excruciating detail until it loses its potency; young children might play out what happened with toys. Virtual-reality simulations have been used on soldiers. One therapist compares the work to treating a burn victim: layer after layer.

Amit Etkin and colleagues at Stanford University are studying how the brain circuits that control fear can be tweaked with the aid of SSRIs (a class of drugs, some of which are used to treat depression or anxiety) and transcranial magnetic stimulation, in which an electromagnet held close to the scalp transmits magnetic pulses to the brain. They found that stimulating a part of the frontal lobe can reduce activity in the amygdalae, which could lessen the symptoms of PTSD. Within five years, thinks Dr Etkin, new therapies will be available, including applying brain stimulation or using drugs to enhance the effects of talk therapy. Better treatments for other anxiety disorders, which afflict a third of Americans, could follow.
Even if new treatments for PTSD take longer to develop than hoped, acceptance of PTSD’s inherently physical nature could encourage sufferers to seek help earlier. Rape victims in Dr Kaysen’s practice typically waited 20 years before turning to her; Dr Marmar has treated veterans of the second world war who had tried to cope with their nightmares for as long as 40 years.
In a freezer in Boston are 50 samples of brain tissue donated to the world’s first brain bank dedicated to the study of PTSD, set up by the Department of Veterans Affairs. More veterans and civilians, with and without the disorder, are filling in health questionnaires and pledging to donate brain tissue after death. Those who could not be healed themselves might help arm future generations against the same suffering, or perhaps, one day, help prevent it altogether.

Fear itself | The Economist

23andMe Launches New Health Tests, Navigates FDA Regulations - iHealthBeat

Consumer driven genomic testing joins consumer driven laboratory testing.

Both promise to reduce health care costs. But, will established laboratories oppose these efforts. The disruption will be massive.  The key issue is FDA approval and reliability of results.

The development pipeline may be altererd forever.

Elizabeth Holmes, CEO and owner of Theranos states that publishing basic research in peer reviewed journals takes too much  time and expensive delays.  She prefers subitting to the FDA directly.  But does the FDA have the manpower to establish reliability and repeatability of that data ?

Background on 23andMe

On Wednesday, genetic testing company 23andMe announced that it will provide customers with health information again, but in a more limited capacity because of continuing regulatory involvement from FDA, the New York Times reports.

23andMe Co-Founder and CEO Anne Wojcicki launched the company with investments from her then-husband Google Co-Founder Sergey Brin (Pollack,New York Times, 10/21). 23andMe launched its first genetic test, the Personal Genome Service, in 2007 (Humer/Steenhuysen, Reuters, 10/21). The company said its original $99 test could predict a likelihood of developing conditions such as:
  • Alzheimer's disease (Perrone, AP/Sacramento Bee, 10/21);
  • Breast and ovarian cancer;
  • Certain heart conditions (Reuters, 10/21); and
  • Parkinson's disease (AP/Sacramento Bee, 10/21).
However, FDA in 2013 ordered 23andMe to halt sales of the service because the tests had not received FDA approval (Reuters, 10/21). Since then, the company has used the genetic data it collected to fuel drug research and has focused on analyzing family history and ancestry, which is not FDA-regulated. More than one million people have used 23andMe's saliva-based test to learn about their genetic code (AP/Sacramento Bee, 10/21).

Details of 23andMe's New Testing Service

About eight months ago, FDA approved 23andMe's carrier screening test for Bloom Syndrome, a disorder that causes short stature and a predisposition to cancer. FDA then reclassified such carrier screening tests as Class II medical devices, meaning they no longer require premarket approval, which involves clinical trials. 
On Wednesday, 23andMe debuted a new $199 carrier screening test that can predict whether a person will pass on one of 36 conditions to a child, including:
  • Beta thalassemia;
  • Cystic fibrosis;
  • Sickle cell anemia; and
  • Tay-Sachs disease (Reuters, 10/21).
In addition, the test can predict non-medical traits, including:
  • Eye color;
  • Earwax composition (New York Times, 10/21);
  • Freckles;
  • Hair curliness; and
  • Lactose intolerance (Reuters, 10/21).
In addition, 23andMe still is working toward gaining FDA approval for personal tests predicting an individual's likelihood of developing specific diseases and how that individual might respond to specific drugs

23andMe Launches New Health Tests, Navigates FDA Regulations - iHealthBeat

More on the Theranos WSJ Interview--It's All About the Nanotube !

Friday, October 16, 2015

Theranos, one of the hottest new biotech startups, has a huge credibility problem - Vox

The Wall Street Journal and VOX Updated by  

According to Theranos founder Elizabeth Holmes, her technology amounts to nothing less than a health-care revolution: a disruptive and lifesaving innovation that delivers cheaper, earlier, and less painful results.

But Theranos, and Holmes, has also been surrounded by a dark cloud of suspicion. Critics have asked for proof that the company's technology actually works, and that its results are accurate. Holmes — the world's youngest self-made woman billionaire at 31 — and her PR team have mainly responded by citing intellectual property concerns and suggesting that the seeds of doubt have been sown by incumbent laboratory companies such as Quest and Laboratory Corporation.

Elizabeth Holmes talks with Matthew Herper at the 
2015 Forbes Under 30 Summit. (Image: Glenn Davis)

Some are questioning the accuracy and reliability of the results of their testing. Theranos offer a menu of tests, however only one test, HIV, has been approved by the FDA. And there have been some 'insider' employees who question the accuracy of the "Edison machine". These claims are refuted by it's founder, Elizabeth Holmes in a one thousand page rebuttal presented those claims to investigative reporter Matthew Herper of Forbes magazine  

In a series of tweets Elizabeth Holmes also counters Mr Herper's report.

There were other bizarre revelations in the Journal piece. Some parts of the Theranos website, which carried claims Carreyrou was probing, disappeared during his investigation. One former employee, Dr. Ian Gibbons, killed himself, and after the reporter spoke to his widow, "a lawyer representing Theranos sent her a letter threatening to sue her if she continued to make 'false statements' about Ms. Holmes and disclose confidential information."
The story goes on like this: Theranos repeatedly swings back at the Journal, even sending representatives to the homes of some of Carreyrou's sources to ask them to sign statements saying the newspaper "mischaracterized their comments."
Unsurprisingly, almost as soon as the story went up, the company published a statement denying many of the facts in the piece: Theranos' website elaborated their rebuttal statements.
Elizabeth Homes states;
“We’re under real attack from the lab industry which is seeding all sorts of stuff about us into the press,” Holmes told me, as you can see in the video above. Wait, I said to her. A lot of the people with questions Theranos are good, thoughtful people who are not in anybody’s pocket. She doubled down: “To be clear, the commentary in the press is 100% instigated by the lab industry and it showed up in the press about us last year and it’s just been repeated. What I would say is that we’re the only laboratory company that is really focused on transparency.”
According to Wikipedia, Elizabeth Holmes excelled early in life and later at Stanford University, where her original idea was developed.
Holmes proposed establishing a company to Professor Robertson in the fall of 2003, while she was a 19-year-old sophomore at Stanford. She used money that her parents had saved for her education to establish Real-Time Cures in Palo Alto. Later, she changed the company's name to Theranos (an amalgam of "therapy" and "diagnosis"),[9] because she believed that many people had a cynical reaction to the word "cure."[6] Holmes initially worked out of a basement of a group college house.[3] She dropped out a semester later to pursue her business career full-time. Professor Robertson served as a director of the company.
The company grew gradually over the next decade, raising $400 million from Draper Fisher JurvetsonLarry Ellison, and others. Theranos operated in "stealth mode" during this period, remaining highly secretive to avoid potential competitors and investors who could fund a competitor. The company took three former employees to court in 2007, accusing them of misappropriating trade secrets.[12]
By 2014 the company offered 200 tests and was licensed to run in every state of the US.[6] It had 500 employees and was valued at more than $9 billion. Holmes retained control of more than 50% of the company's equity.[13]
As of 2014 Holmes has 18 US patents and 66 non-US patents in her name and is listed as a co-inventor on over one hundred patent applications.[6] Holmes is the youngest self-made female billionaire on the Forbes 400 list at #111, with an estimated net worth of $4.6 billion.[2]
Arguments that dominant laboratory companies such as Quest and Labcorp have much to lose if Holmes innovative testing proves reliable and accurate. She argues they are behind much of the controversy.
Elizabeth Holmes idea is to allow patients to order their own laborataory blood tests, walking into a Walgreens and ordering the test for themselves.
One other component for success  will be if health plans will reimburse for a Theranos test ordered by a patient or a physician. Bloomberg reports a Theranos-- Capital Blue Cross agreement for reimbursements.
Theranos may be a disruptive technology for the clinical laboratory world. It's progress will be measured ultimately by individual decisions regarding specific test by FDA and/or CLIA wavers. Ultimately consumer acceptance as well as physician endorsement will predict success or failure for Holmes.
Health Train Express supports her efforts despite doubts by her competitors and others. Large and established companies have much to  lose and/or learn from her creative efforts.

Theranos, one of the hottest new biotech startups, has a huge credibility problem - Vox