Tiered Plans: Threat or Promise

Today’s Managing Health Care Costs Indicator is 1.5x

Monday’s Boston Globe had an article on page one (“top of the fold”) on tiered health plans.  The title was “Tiered health plans cutting costs, restricting options.”    The authors tried to be even-handed – but stories with narrative force are more compelling than some dry statistics.  It’s hard to come away from the article with a positive feeling about health plan network options that charge patients more for care at hospitals and providers with higher prices.

The focus of the article is Glenn McCarthy, 48, who was found to have prostate cancer.  Faced with a potential month-long wait to have surgery done at a community hospital ($150 cost share), he chose to have the surgery at an academic medical center ($1000 cost share).  His total out-of-pocket liability ended up not being a thousand dollars, but $4500 because he had a series of complications that led to additional cost sharing.   He and his wife are now struggling to pay this off, and their insurer has denied their appeals.

Enrollment in narrow network or tiered plans has increased sharply in the last few years.   The Massachusetts Group Insurance Commission, which purchases health insurance on behalf of state and governmental employees and retirees,  offered a three month employee “premium holiday” to encourage state workers to choose narrow network plans this year, and 10,000 made the move.

Employers have found that when overall cost of care has increased but they feel cannot afford to raise the employer contribution to this, they can

• Raise employee contributions
• Lower the benefit level (raising member cost sharing across the board)
• Raise cost sharing for providers who have very high prices. 

The last option is attractive because it could encourage some patients to move to more cost-effective providers, as well as encourage providers with high allowed prices to lower these prices. That’s happened in California when CalPERS, which covers state and other governmental employees and retirees started using ‘reference pricing’ for knee and hip replacements.  Some hospitals with allowable fees in excess of the reference price renegotiated their rates to avoid losing patients.

Tiered networks that are based on price alone could actually destroy value by directing patients to hospitals or providers of lower quality.  Most of the available tiered plans use some form of quality ranking to be sure that high quality providers are available within the lower cost tier.

Clearly, tiered networks have the attention of the more expensive providers:

“[Tiered Networks] present one of the greatest threats to access that there is in the Commonwealth right now,’’ said Dr. James Mandell, chief executive of Children’s Hospital Boston.

Many would say that the greatest threat to access is high cost – not health plans that offer lower premiums and a choice of paying higher cost share to get care at Children’s, which is very expensive compared to comparable hospitals.  How expensive?  The Attorney General reported that risk adjusted total medical expense at Children’s was among the three highest in Massachusetts for all three major health plans – over 1.5x the least expensive provider in BCBSMA and Tufts, and over 1.9x in Harvard Pilgrim. 

As I’ve noted before, increase in unit cost is a major problem in Massachusetts, and is the major factor making health care in the US more expensive than in other developed countries.

Clearly,  with huge disparities in cost and without clear correlations with quality, efforts will continue in Massachusetts to rein in higher allowed prices.   Tiered networks are a market lever to try to reduce the price at the highest cost facility. 

There are alternatives.  Former Massachusetts governor Mike Dukakis spoke earlier this week at Harvard School of Public Health and said

If we paid a little attention, it might be a good idea, to the experience of other countries around the world who are doing this and who, for some reason, seem to be able to provide rather good health care to their people at half the cost we do -- whatever the siltstone, whether it’s Australian medicare or a multi-payer system in Germany or an essentially privatized system in Switzerland -- every one of them regulates cost, without exception…Now don’t get me wrong. Nobody loves having to regulate. We had something called the rate-setting commission when I was governor... We treated hospitals as public utilities. They couldn’t raise their rates a nickel unless they went to the rate-setting commission. We certainly didn’t have these huge disparities between what Partners gets and what the BI gets. Wouldn’t allow it. So, we’ve got to get on with the business of regulating costs. 

I’m guessing that we’re likely to continue preferring market approaches to price disparities, so tiered networks will continue to expand.   Efforts to reintroduce price regulation continue to heat up as well.

USPSTF Recommends Against Prostate Cancer Screening

Today’s Managing Health Care Costs Indicator is $3 billion

Word leaked late last week that the US Preventive Services Task Force (USPSTF) will recommend against prostate cancer screening with the prostate specific antigen.  The evidence has been piling up for years that routine PSA screening doesn’t save lives – and the cost, morbidity and early death from treatment, and incontinence and erectile function problems caused by this screening are enormous.  This is the link to the USPSTF draft recommendation, which rates prostate cancer screening a “D” (moderate or high certainty that the intervention harms, has no benefit, or harms outweigh the benefits). 

The problem with prostate cancer screening is not only that there are many false positives.  More importantly, there are many true positives that find cancer that would have had no impact on the patient’s life span or quality of life.  A man whose prostate cancer would never have hurt him who has this treated is always worse off!   The scientist who discovered PSA, Richard Ablin, editorialized against its use in screening in 2010.

Prostate cancer treatment is big business, too.  Urologists and radiation therapists make a substantial portion of their income from prostate cancer treatment, and hospitals and physician groups have made huge capital investments in IMRT (intensity modulated radiation therapy) and even proton beam therapy centers. 

Shannon Brownlee, author of “Overtreated” (see bottom of web page for book description) has a thoughtful and well-timed article in the New York Times Magazine today about this difficult issue.  She asks “Can Cancer Ever Be Ignored?”  She reports that the USPSTF was ready to release its finding on PSA screening in 2009 – but the blowback from the suggestion that year that mammography should not be routinely recommended for women between 40-50 delayed the recommendation. It was again delayed before the 2010 midterm elections – and even now the report was put out in draft form only after the content was leaked in the press.  

This draft recommendation is finally published even as a separate investigation suggests that 40% of the cancer screening ($1.9 billion)  services paid for by Medicare are medically inappropriate.  This report only considered PSA screening inappropriate in men over 75. If all PSA screening was considered in appropriate, the portion of cancer screening that is inappropriate would be substantially higher. 

There are some screening tests that improve the quality of health care – including pap smears and mammograms for women between 50 and 69.  There is evolving evidence that CT scans might appropriate for screening those at high risk of lung cancer, although the literature on this is not yet fully settled. 

It’s reassuring to think we can save lives (and money) by screening.  This is true less often than we would wish. 

PSA Scorecard

$3 billion spent on PSA screening annually

1 million men treated with surgery, radiation therapy or both who would not have been treated without PSA testing

5000 deaths shortly after surgery

10-70,000 major complications

200-300,000 cases of impotence, incontinence, or both

 Source 

New Prostate Cancer Vaccine : Quadrant Four Medicine

Today’s Managing Health Care Cost Indicator is $93,000

The Washington Post has a thoughtful article this morning about a new prostate cancer vaccine, Provenge.  The vaccine must be individualized for each patient, and the price has been set at $93,000 per person (each receives just a single dose). Average life expectancy increase using Provenge is 4 months.

This is great news. Individualized medicine is here!  The promise recounted in Jerry Groopman's Dr Fair's Tumor (1998,  New Yorker) is finally available for the masses.   This drug will be very desirable for people with terminal metastatic prostate cancer, their families, and their providers.   It's also good news for those of us who will get other cancers - where this type of technology could be life-saving or life-prolonging.

The good news, of course, carries a steep price tag.  The increased life expectancy means that Provenge will cost substantially over $300,000 per quality adjusted life year. ($93K *3, and assume that for someone with terminal prostate cancer, each surviving month will be at least slightly discounted because of suffering or disability associated with the cancer).     That's far more than we usually spend -and a price point that could leave us unable to invest in other health care initiatives with as much or more promise.  Even this steep price tag can be good for those with cancer, though.  Such a high price encourages more investment in future biologics to treat cancer.

Most prostate cancer is in those over 65, so Medicare's payment approach for Provenge will determine whether this drug is used commonly, or whether it is available to only the superrich.   Medicare has established  a  national coverage analysis for this product, and will have a public hearing later this month.  If Medicare makes a national coverage determination, it will be binding on all Medicare intermediaries across the country.

This is a good example of a "quadrant four" decision. It's much like Folotyn, another recent cancer therapy priced similarly.

It's easy to decide to push more quadrant one therapies (increase quality while decreasing costs). The problem is that we don't have enough of them!  It's easy to decide to prevent quadrant three therapies (increase cost while lowering quality).   It's tough to decide to push medical decisions in quadrant two (where quality is lowered a tad for a huge price savings).   It's also tough to forgo incremental quality at any price - even a high one. 

There is rumbling that having a national coverage analysis is akin to having Don Berwick, the head of CMS, convene a 'death panel.'    We need to have a sensible national discussion about what price we can afford to pay for incremental health . But it's hard to do that, especially when patients have much more compelling stories than a bunch of dry statistics that only an accountant could love.   

The conversation about limits to the resources we want to dedicate to health care will be a difficult one.  We're likely not ready for it. 

Disconnect between knowledge and clinical practice

Two articles published this past week demonstrate that there is a striking disconnect between publication and dissemination of knowledge.

Last week, the Wall Street Journal had an article on angioplasty with stents.   The COURAGE study in the New England Journal (2007)  showed that angioplasty (WSJ estimated cost $15,000) gives slightly quicker relief from chest pain of angina, but does not lower the risk of heart attack or death.  In fact, the stock price of Boston Scientific went down by 23% the month the study was published.   However, the rate of angioplasty has continued to increase after a brief dip.   The evidence was in – but this did not lead to a change in practice.

The Wall Street Journal conclusion is that comparative effectiveness doesn’t work.  I think this shows it didn’t work – not that it can’t work.

Yesterday’s New York Times  has an article about the rapid adoption of the daVinci robot to do prostate cancer surgery.  In fact, the only study done shows that those getting laparoscopic or robotic surgery appear to have more incontinence and erectile dysfunction than those who have traditional “radical” prostatectomy.   (This study combines laparoscopic and robotic surgery, and infers complications from claims) The urologists focus on a 40 year-old policeman who was able to have sex a few days after his procedure. Men facing prostate cancer find that heartening, but this is an unusual prostatectomy patients whose experience is not generalizable to most such patients.  This anecdote is certainly not enough to be the foundation for public policy.

What gives?

Periodically, we hear complaints that it’s difficult to disseminate innovation in health care.  I’d say that this is the wrong diagnosis.  Innovation is speedy when it leads to higher profits and more margin opportunity. That’s the case study of the daVinci robot for prostatectomy.  Dissemination of innovation and knowledge is painfully if that knowledge leads to lower margins and less profit opportunity.  Hence, the message that angioplasties with stents don’t offer that much benefit to those with stable coronary disease has little influence on clinical practice.

Should we give up on comparative effectiveness research?

Absolutely not.

It’s critical that we have evidence to determine what is best practice.   We also need to align payment with evidence-based medicine.   We need to decrease the profit margins of procedures with unclear incremental benefit. This is not easy to do, of course.  Cardiologists,hospitals and medical device makers don’t want to lose margin of angioplasties, and they will argue forcefully that angioplasties are far better than medical therapy for a select group of patients – those with unstable angina or acute evolving heart attack.  That argument is correct, and perhaps we need different fees based on diagnosis since the value is different based on diagnosis.

Similarly, urologists and hospitals will argue, correctly, that for surgeons with a long track record of performing robotic surgery – that method is indeed likely to be better, and can even decrease resource cost by saving OR time.  (Most surgeons, with less than a hundred of cases behind them, take more time with robotic surgery. It’s likely that the ‘learning curve’ is one of the reasons that the robotic surgery study results were so disappointing.)  Some might suggest differential payments for surgeons based on their volume – but frankly that’s complicated and might encourage aggressive surgery recommendations.  My preference would be a bundled rate –and if the hospital and physician feel that a high-capital-cost item will be worth it – they can spring for it. 

The issue of high fixed costs and low marginal costs with new technology also looms large.  Once a hospital has a daVinci robot, there are very few incremental costs associated with increased volume. Therefore, once technology is in place, it is highly likely to be used.

We need to do more research on comparative effectiveness, disseminate the results quickly and effectively, and consider results was we design payment and incentive systems to drive more value for our patients and for health care purchasers.

By the way, the governor of Massachusetts has announced a wide-ranging plan to regulate health care cost increases. I'll be planning to blog on that later in the week. 

Would a billboard sway your surgery?

We all know that a rush to embrace new technology is part of the reason why health care costs continue to increase.  We also know that new technology is not always better than the ‘tried and true.’

This week’s JAMA  has an article reviewing complications from prostate surgery, the newfangled often ‘robotic’ minimally invasive surgery, as well as the terrifyingly-  named “radical” prostatectomy.   I mean, who would want to have radical surgery if there was a less-invasive alternative.  Further, I pass a billboard on the Mass Pike every day on my way to work proclaiming the benefits of robotic prostate surgery.  Minimally invasive robotic surgery was under 1% of prostatectomies in 2001, and over 40% in 2006.   Harvard Link

It turns out that the minimally invasive surgery is better (in some ways)– patients spend less time in the hospital, get fewer transfusions, and have fewer postoperative pneumonias.  However, the rate of incontinence and erectile dysfunction (ED) is statistically significantly higher.  This is not a perfect study – the authors used medical claims to ascertain incontinence and erectile dysfunction. In fact, actual rates of complications are dramatically higher if an investigator asks patients directly, rather than relying on physicians to code ED or incontinence for billing purposes.

So – the billboard on the Mass Pike is not the source of truth about advances in surgical therapy.

On another note about medical marketing, NPR had a good piece on direct-to-patient advertising by the pharmaceutical industry.   Most of us have forgotten Seldane, a withdrawn non-sedating antihistamine that skyrocketed from sales of under $40 million to sales of over $800 million - and this was before the manufacturer could even use the name of the prescription medication on TV!

It’s been a good day of reminders that direct-to-patient advertising generally indicates high margin – as opposed to high value.

Prostate Cancer Screening: Rough Estimate of the Cost

Two studies in last week’s  New England Journal Of Medicine showed disappointing results from prostate cancer screening. This is a reminder that investments in preventive care are not always a good idea.  The United States study, completed in 10 centers, included 77,000 patients and showed a nonsignificant increase in death rates among those patients who were randomly assigned to screening.  The European study, an amalgam of seven different studies which had different designs, included 182,000 patients, and did show a decrease in death from prostate cancer of 7 per 10,000. However, 49 men were treated for prostate cancer for each life saved – leading to an enormous amount of incontinence and impotence. 

 

I’ll turn 50 next year – and it’s not looking like I’ll be getting my first PSA test!

 

The morbidity from all prostate cancer treatment is considerable – whether prostate removal (radical prostatectomy) or radiation (either external beam or implantation of radiation ‘seeds’).  There is has been little written about the cost of the increased cancer diagnosis from  prostate cancer screening – so I figured I would provide some “back of the envelope” guesstimates of the cost of our prostate cancer screening.

 

Population:  18.7 million  ages 50-59 (United States)

Increased Cancer Diagnoses: 3.4% (8.2% in the screening group and 4.8% in the control group)

è Increased Cancer diagnoses: 638,542 for this population over about a decade

 

Distribution of Treatment (and associated cost)

Wilson, et al Cumulative cost pattern comparison of prostate cancer treatments, Cancer 109: 18-527

Note that this is Medicare data, so this understates the cost compared to a population under 65.

 

è Total excess cost over 10 years for this population: $27 billion

 

That’s not a trivial figure even in these days of massive corporate bailouts.

 

	%age	Cost	#	Spend
Radical Prostatectomy	55%	$        36,888	350,055	$  12,912,828,840
Cryotherapy	3%	$        43,108	18,933	$        816,163,764
Brachytherapy	15%	$        35,143	93,684	$    3,292,336,812
External Beam	9%	$        59,455	57,360	$    3,410,338,800
Androgen	13%	$        69,244	85,129	$    5,894,672,476
Watchful Wait	5%	$        32,135	33,378	$    1,072,602,030
TOTAL INCREASED SPENDING				$  27,398,942,722